Former Apax Israel No. 2 seeks to raise $165 million fund amid legal battle with Zehavit Cohen
Leox Opportunity Fund, headed by Erez Nahum, plans to invest $20 million-$30 million per deal in Israeli consumer, technology, defense and services companies.
Against the backdrop of the lawsuit he filed against Zehavit Cohen and the Apax Israel fund she heads, Erez Nahum, the former No. 2 executive at Apax Israel, is seeking to raise a new investment fund worth NIS 500 million ($165M) that will focus on acquiring stakes in medium-sized Israeli companies.
Calcalist has learned that Nahum is currently meeting with institutional investors, banks, family offices and company owners to present his new investment vehicle, Leox Opportunity Fund. According to the presentation being shown to potential investors, the fund plans to invest $20 million-$30 million in each transaction, targeting companies with valuations of $100 million-$200 million and enterprise values (EV) of approximately NIS 300 million-$400 million.
The fund would operate in the same market segment as Apax Midmarket Israel (AMI), Apax Israel’s mid-market investment arm, and if launched, would compete with it alongside a growing number of established and newly created private equity funds targeting Israeli small and medium-sized businesses.
According to Nahum’s investor presentation, Leox Opportunity Fund will focus on investments in consumer companies, services, defense industries and technology companies. Nahum has told investors that the fund is already in advanced negotiations for its first investment, which is expected to be completed as a co-investment alongside one or two institutional investors.
The fund is seeking strategic partners for larger transactions and plans to deploy all committed capital within four years. The proposed fee structure includes a 2% management fee and a 20% carried interest fee. Nahum is also expected to bring in one or two additional partners to help manage the fund.
In recent months, there has been increased activity among investors seeking to establish private equity funds focused on Israel’s small and mid-sized companies.
One such vehicle is the Brit Fund, founded by Ami Boehm, a former senior executive at FIMI and current chairman of BrainsWay and Gilat Satellite Networks.
Another is One Invest, founded by former executives from Phoenix Holdings and Clal Insurance Enterprises Holdings and led by Ofer Aviran, a former senior executive in Phoenix’s investment division. The fund has already completed two investments. Stella Cohen, a Phoenix director and former investment manager for the Safra family, has also established a similar investment vehicle, David Group.
Nahum spent approximately eight years at Apax Israel, where he rose to partner and became the fund’s second-ranking executive. During his tenure, he served as chairman of Psagot Investment House and as a director at Max Stock and other portfolio companies. Some of Apax Israel’s investments were led jointly by Nahum and Cohen.
Before joining Apax, Nahum worked in investment banking at Bank of America Merrill Lynch in New York.
However, his relationship with Cohen deteriorated. In February, Nahum filed a NIS 10 million ($3.3 million) lawsuit in the Tel Aviv District Court against Cohen, Apax Israel and Apax global, alleging that he was unlawfully dismissed and subjected to workplace harassment.
In the lawsuit, Nahum claims that Cohen created a toxic work environment and that he was fired for improper reasons despite being an outstanding employee who had been viewed as Cohen’s potential successor.
Cohen rejected those claims in her defense filing, alleging that Nahum attempted to persuade Apax Global’s CEO to remove her and replace her as head of Apax Israel. According to Cohen, after that effort failed, Nahum launched a campaign of retaliation through the lawsuit, which she claims was intended to damage her reputation and business.
Cohen further argued that Nahum was not subjected to harassment or abuse, but rather received the company’s trust and support, while she claims that he violated his duties as an executive and employee, making his dismissal justified.
