Avi Katz to Expand His $650 Million Real Estate Fund to New York

(Bloomberg) -- Hagshama Fund, the private investment firm that has raised about $650 million from individual investors in Israel and the United Kingdom, will begin operating from New York next year as it seeks to boost real estate investments.

The Petach Tikva, Israel-based fund is targeting people willing to pool on average $25,000 with other investors to own slices of self-selected real estate projects in the U.S., Canada, Israel and in London, Avi Katz, who founded Hagshama in 2009, said in an interview. He also plans to branch into countries with growing middle classes, including Poland and Panama.

“The future of investment is where anyone can invest in small sums all over the world," said Katz, who owns 30 percent of the company. "Until recently, only the largest holders of capital had the ability invest in projects all over the world. Anyone can now go on Google Earth, see the color of the windows in a Manhattan building, or an office door in Tel Aviv."

In the U.S., Katz is going after a surging upper-middle class and a savings rate that has been steadily rising since 2013. But he'll have to contend with some of the world's largest pension funds that also offer savers ways to invest in real estate.

His fund has yielded an average annual return of about 15 percent, according to local press reports. Hagshama has about 23,000 investors and is also opening an office in Madrid in January, Katz said. Investments include a $6 million equity stake in a $21 million residential building in Manhattan and a 9 million pound ($11 million) stake in a 27 million pound office building in Holborn, London.

Katz is now targeting the middle classes after making money through discount products. After retail operator Alon Blue Square Israel Ltd. bought his dollar store chain for 180 million shekels ($47 million) in 2008, he founded Cofix Group Ltd., which sells coffee, juices and snacks for 5 shekels. The company has opened 152 branches across Israel, including 24 supermarkets with the same pricing model.

Now, Cofix has expanded into Moscow and plans to open 100 Russian stores by mid-2018, Katz said on Oct. 10.

To contact the reporter on this story: Yaacov Benmeleh in Tel Aviv at ybenmeleh@bloomberg.net. To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Ross Larsen