iami-based private equity firm Affinity Partners, led by Jared Kushner, the son-in-law of former U.S. President Donald Trump, has announced its inaugural investment in Israel. Affinity Partners is set to acquire a 15% stake in Shlomo Group’s car and credit business unit for NIS 570 million (approximately $150 million).
This significant deal signifies Affinity Partners’ entry into the Israeli market. Under the terms of the investment agreement, a new subsidiary will be established with an equity valuation of NIS 3.8 billion, consolidating Shlomo Holdings’ operations, which encompass car leasing, car rentals, car sales, and credit services.
Shlomo Holdings will maintain an 85% majority ownership in the newly formed subsidiary, while Kushner’s private equity fund, backed by Saudi Arabia’s sovereign wealth fund, will possess the remaining 15%. It’s worth noting that the transaction remains subject to requisite approvals, as indicated in a joint statement by both partners.
This investment comes amid ongoing efforts by the Biden administration to facilitate a normalization agreement between Saudi Arabia and Israel. While Israel lacks formal diplomatic relations with Saudi Arabia, the two nations have made strides towards closer ties in recent years.
Jared Kushner, recognized for his role as an advisor on Middle East affairs during the Trump administration, played a pivotal role in negotiating the Abraham Accords—an array of normalization agreements signed by Israel with the United Arab Emirates, Bahrain, Morocco, and Sudan.
Kushner expressed confidence in the long-term growth potential of Israel and the broader Middle East, stating, “We are bullish on the long-term growth prospects of Israel and the broader new Middle East. Shlomo’s historical growth has been rock solid, and the company has many exciting opportunities in its future.”
Affinity Partners, managing assets totaling $3 billion, enjoys substantial support from Kushner’s network of contacts in the Arab world, cultivated during his tenure in the White House. Earlier this year, reports surfaced that the UAE and Qatar had augmented the substantial investment already made by Saudi Arabia’s sovereign wealth fund in Kushner’s private equity firm.
Founded over half a century ago as a family business by the late Shlomo Shmeltzer, the Shlomo Group initially specialized in car rental, leasing, and automotive services. It has since evolved into a diverse conglomerate with interests spanning transport, insurance, finance, infrastructure, construction, shipping, logistics, and real estate. Notably, the group’s automotive services division boasts a fleet of over 78,000 vehicles, capturing a significant 30% market share within the automotive industry.
Among its various subsidiaries are Shlomo Holdings, Afcon Holdings, Shlomo Insurance, Shlomo Motors, Israel Shipyards, Shlomo Real Estate, Tadiran Telecom, and Talma Shlomo Tourism. Operating in Israel, Romania, and Germany, the group achieved a consolidated turnover of approximately NIS 4.9 billion in 2022, employing a workforce exceeding 5,000 individuals.
As part of this investment agreement, Kushner’s fund commits to fostering joint business ventures in the Middle East and North Africa, as stated by the Shlomo Group.
In response to the deal, Asi Shmeltzer, Chairman of the Shlomo Group, emphasized its profound significance, noting, “This partnership with Jared Kushner and Affinity symbolizes the Middle East my father always dreamt of—a region of potential where Israel can play a critical role in its prosperity.”
Kushner’s fund recognizes the appeal of the Shlomo Group’s operational car leasing model, which has proven to be both profitable and adaptable, particularly for the growing middle class in the Middle East and North Africa.
Shmeltzer highlighted the strategic implications of this partnership, stating, “The introduction of a strategic investor, such as Affinity Partners, will help us enhance our ties with businesses and identify new economic opportunities for Shlomo’s companies in the Middle East, U.S., and other countries.”
Recent reports in August had indicated Affinity Partners’ discussions to acquire a 25% stake in Israel’s Phoenix Insurance Agencies for approximately $250 million.
