MODDI KERET Chairman of Gmul

United World
Israel's 60th anniversary is approaching this coming May. Today Israel is known for its entrepreneurship, innovation high concentration of start-ups, thus forging a new future for the country as a centre for rich new ideas. In your opinion how important is this anniversary to Israel?

Mr. Moddi Keret

The anniversary is extremely important because it celebrates the past 60 years in which Israel has transformed itself from an undeveloped country into one that is near the top of global rankings in many ways. This transformation has been recognized by the many global companies, including Google, Microsoft and IBM, which have chosen to establish an important presence in the country.

The country has faced many difficulties during the course of this transformation, and the fact that we have prevailed over the past 60 years and continue to thrive in a region that is not the friendliest is a testament to the spirit of our people.

United World
What is it that has made Israel so attractive to these companies?

Mr. Moddi Keret

The main attraction is the high quality workforce that exists in Israel. The workforce is well educated and highly motivated and much of this comes as a result of the country's mandatory military service. In the military, the importance of teamwork is stressed and this is easily translated in the corporate world. As such, companies that rely on teams of workers to work together in a development function, such as software development, find in Israel a workforce that has the characteristics they are seeking. In addition, the goal oriented and innovative characteristics that are utilized daily in the military translate well into situations such as engineering and computer programming.

The workforce is also highly qualified due to the large Russian immigration into Israel that occurred in the 1990s. This wave of immigrants included many with expertise in advanced mathematics and engineering disciplines. These skills, as well as their higher education, eased their integration into society and provided the country with an immediate infusion of brain power that would have taken decades to develop in the normal course.

United World
With FDI reaching just over $10 billion in Israel in 2007 of which a large proportion of this was invested into the High-Tech sector and Research & Development, which other sectors do you see having the greatest potential for future FDI?

Mr. Moddi Keret

While the real estate sector has already experienced a great deal of growth and investment over the past few years, I think this trend will continue to dominate for the near future.

The recent investments in Israeli real estate have been from two sources. Firstly, many foreigners from countries such as France, the United States, and the United Kingdom have made aliyah or have acquired second homes in Israel over the past 5 years. Whether these acquisitions were initiated due to Zionism or anti-Semitism elsewhere in the world, I believe this trend will continue.

Secondly, as I mentioned earlier, many global companies have been attracted to Israel due to its high quality workforce and have established research and development functions here. These investments in human capital have been coupled with large investments in real estate and infrastructure in order to provide their workforce with the optimal environment for success. I believe this trend will also continue as more and more companies recognize the opportunities for technical advancement that can be attained through investment in Israel.

United World
Founded in 1950 as a central body for investments and provident funds, you and your partners completed this past December the transfer of control of GMUL and with it Metis Capital. How has your acquisition helped to make GMUL a stronger company?

Mr. Moddi Keret

GMUL is a company with a long and proud history. It was formed in 1950 and was the largest investment group in Israel; managing all of the investments of pension funds and educational funds. In 2001, the company, which was owned by Bank Hapoalim, was privatized and sold to a US investor. The company was later sold to an Israeli group who ultimately sold it to the current investor group.

Our acquisition means that GMUL will benefit from the experience and tradition of its new shareholders. Leon Recanati, one of our partners, is a senior member of one of the most established families in Israel and is one of Israel's premier business figures. Leon is currently Chairman & CEO of GlenRock Israel, a private equity investment company. Until 2003, Leon served as Chairman & CEO of IDB Holding Corporation Ltd., one of the largest investments companies in Israel, Chairman of Clal Industries and Investments Ltd. and Chairman of Azorim Investment Development and Construction Ltd. Leon's guidance and input is invaluable as we grow the company.

Prior to arriving at GMUL Investments, I worked with the Arison family for 14 years at Bank Hapoalim; one of the largest banks In Israel. Ultimately, I ran the bank's Housing and Construction division which has been a major growth sector in Israel. The division had a number of rough years, but together with the previous CEO, Ehud Shani, we turned the company around and nearly quadrupled its market value.

Itsik Hamamy, GMUL's CEO, is also a partner in the acquisition of the Company and brings with him many years of real estate experience and valuable insight. Itsik has served as CEO of a number of companies including Metis Capital Ltd and Building and Assets Company Mishor Hachof Ltd. (Marlaz). Under Itsik's leadership, Marlaz made substantial real estate investments in Israel and overseas and entered foreign markets including Eastern Europe and Central America.

The new management team has utilized its experience to create a new strategy for the company. Our new strategy focuses on investing in real estate, both development projects and income producing properties. This strategy will take advantage of the company's substantial cash reserves and will leverage off of our existing investments in many residential projects in Israel and overseas. In Israel, the investments are in cities such as Netanya, Tel Aviv, Petach Tikva, Yehud and Rehovot. Some of our overseas investments are in Romania, Albania, Turkey, and the United States.

While some Israeli companies are focusing on the United States and China, we have analyzed the market and risk factors and have decided to continue focusing on Israel as well as certain countries in Central and Eastern Europe, including Poland, Romania, Ukraine, Turkey and Serbia. We believe these countries represent opportunities for continued growth.

United World
Israel and the USA continue to have strong economic ties, amongst many other mutual interests. In 2006, bilateral trade totaled more the $30 billion and the USA continues to be the largest export market for Israel. What is the extent of GMUL's presence in the US?

Mr. Moddi Keret

Until recently, we have made investments in the US but have not had an active presence in the market. However, we have recently announced that as a result of a $42.5 million investment, GMUL will be acquiring a 30% interest in Global Real Estate Services Corporation (GRES).

GRES is a Delaware-registered special purpose acquisition company (SPAC) that plans to raise $96-120 million in an IPO on London's Alternative Investment Market (AIM). The company plans to acquire real estate and property services companies worldwide.

We plan to take an active role in GRES and help to create synergistic opportunities between it and GMUL.

United World
5 years from now, what sort of legacy would you like to have left behind?

Mr. Moddi Keret

In the next five years, we hope to build a high quality and balanced portfolio of investments, 70% overseas and 30% in Israel. Such a portfolio will enable us to take advantage of the cycles in the real estate market and identify opportunities wherever they exist.

In the end, we intend to take GMUL's long tradition of leadership in Israel and build on it through our own experience and insight, to establish the company global market leader as well.

United World
Thank You for this interview.