Arbel Finance is the General Partner (GP) of the Arbel Funds, Private Debt & Equity funds focusing on mid-sized Israeli private companies and asset finance.
The Arbel Funds primarily invest through direct private credit facilities, providing flexible and tailored made financing solutions where Israeli Institutional Investors and Banks are absent. In its first two funds, Arbel Finance has raised in excess of 2.5bn NIS.
In many cases, economically creditworthy companies and projects fail to meet the lending criteria of the main street banks, institutional investors and domestic bond market. Such failures may stem from various factors, such as tight timelines, regulatory restrictions, policy hurdles, minimum transaction size etc. Arbel provides an alternative funding source, tailoring bespoke transactions, thus financing business creation and growth and, at times, business survival. Arbel’s experienced team is often able to step up and structure the appropriate transaction for its client.
Further, many Israeli companies seeking to expand their activities in Europe and the USA fail to attract funding from domestic providers. In such cases Arbel addresses this gap by financing its clients at the group level, enjoying advantageous risk/reward terms, while supporting such international expansion.
Furthermore, both global and domestic regulations increasingly favor cash flow based “ability to pay” type credit transactions, while asset rich companies face difficulties in receiving financing to support business expansion in general and opportunistic situations in particular. Arbel is often able to structure asset-based lending solutions, in multiple jurisdictions with favorable financing terms.
Arbel focuses on market niches where capital is scarce, competition in capital provision is low, and prices / returns for the capital provided are attractive. Arbel is unique in its ability to provide both debt and equity capital, to companies and project mostly in the range between 20-200 million NIS per transaction (sub-50mm USD).
Among Arbel’s competitive advantages are:
Arbel’s ability to address the entirety of a client financial needs in a single transaction, in various liquidity and risk profiles, brought to bear in under 200mm NIS financings, enables achieving excess returns with a unique risk / reward profile.
Arbel invests thru a wide range of instruments such as convertible debt, profit participating loans, senior and bridge loans, senior and subordinate / mezzanine debt, securitized assets and structured products.
Risk and Reward Strategy
Arbel seeks to structure transactions with a “skew” in the risk / return profile. Focusing on a low competition market segments with reasonable transaction pricing, results in one of the best risk / reward profile available in the Israeli market, enabling Arbel to achieve double digit returns, while limiting risk and protecting from it.
Arbel was able to achieve its target returns even in the zero-interest rate environment in which Arbel Fund 1 operated from 2017 thru 2022.
