Veritas Capital Raises 70M from Israeli Institutions for Record 0B Defense Fund

2024-12-23

Veritas Capital, a leading U.S.-based private equity firm specializing in government and technology sectors, is raising a record-breaking $10 billion for its ninth fund. This ambitious endeavor, focused on defense technology, has already garnered significant interest from Israeli investors, with institutions like Clal Insurance, Migdal Insurance, and Menora Mivtachim contributing over $270 million. This article delves into the factors driving this investment surge, the unique focus of Veritas Capital, and the implications for the burgeoning defense-tech sector in Israel.

Veritas Capital, known for its expertise in government-related sectors like defense, education, and healthcare, is raising $10 billion for its latest fund, aiming to become the world’s largest defense-focused private equity fund. The firm employs a buy-and-build strategy, acquiring companies and improving their operations for optimal returns.

The fund has already secured $270 million from Israeli institutions, including major insurance companies and private investors. This significant investment underscores the growing interest in defense technology, driven by geopolitical tensions, including the ongoing conflicts in Ukraine and the Middle East.

Veritas Capital, founded in 1992 and led by Ramzi Musallam, has a strong track record of success. Its focus on government-related sectors, particularly those involving national security and defense, aligns with the increasing global demand for advanced technologies in these areas. The firm’s acquisition of Perspecta, a major provider of services to the U.S. government, exemplifies its significant presence in this domain.

While geopolitical uncertainties are driving investment in defense-tech, Itay Elnatan, CEO of Leader Private Capital, emphasizes the need for careful selection and due diligence. He highlights the importance of experience, government ties, and security clearances for successful ventures in this sector.

What Undercode Says:

This article highlights several key trends and observations:

Geopolitical Uncertainty as a Catalyst: The ongoing conflicts in Ukraine and the Middle East, coupled with rising tensions between major powers like the U.S., China, and Russia, are significantly impacting the defense-tech landscape. These geopolitical factors are driving increased demand for advanced technologies in areas like cyber security, artificial intelligence, and missile defense.

The Rise of Defense-Tech as an Investment Hub: The article underscores the growing attractiveness of defense-tech as an investment sector. This is evident in the significant capital being raised by Veritas Capital and the substantial interest from Israeli institutional investors. This trend reflects a recognition of the critical role of technology in modern warfare and national security.

The Importance of Expertise and Due Diligence: Itay

The Role of Private Equity in Driving Defense-Tech Innovation: Private equity firms like Veritas Capital play a crucial role in driving innovation and growth within the defense-tech sector. By acquiring and improving companies, they can help to accelerate the development and deployment of critical technologies.

Israel as a Strategic Hub for Defense-Tech Investment: The significant investment from Israeli institutions underscores the country’s growing importance as a hub for defense-tech innovation and investment. Israel possesses a strong technological base, a vibrant entrepreneurial ecosystem, and close defense and intelligence cooperation with the United States. These factors make it an attractive destination for defense-tech investment.

This article provides valuable insights into the evolving landscape of defense-tech investment. As geopolitical tensions continue to rise and the demand for advanced technologies grows, we can expect to see further significant investments in this critical sector.