The Bank of Israel on Monday named Lena Krupalnik, a veteran institutional investment manager, to oversee the country's sovereign wealth fund which was set up in 2014 following the discovery of huge [offshore] natural gas deposits.
After a four-year delay due to political turmoil and a slower-than-expected revenue stream, the fund began operating last June once taxes on profits from natural gas and other resources had passed a 1 billion shekel ($273.6 million) required minimum.
It was managed temporarily by the central bank's head of markets.
The fund so far has accumulated 2.3 billion shekels ($629 million), the central bank said. It is forecast to grow to as much as $12 billion in the next decade and ultimately reach around $50 billion.
Israel discovered huge deposits of natural gas in the east Mediterranean a decade ago and major production began in 2013.
The wealth fund, aimed at preventing the Israeli shekel from overheating from the sudden expansion in national wealth, was set up in 2014 and was supposed to begin operating in 2018.
It will invest abroad, initially 60% in stocks and most of the remainder in corporate bonds, according to the finance ministry.
The stocks component will be invested in share indexes of developed countries, mostly the United States. Three-quarters of the corporate bonds will be invested in the United States and the rest in Europe in maturities up to 4-1/2 years.
The fund's main sources of income are from the offshore Tamar and Leviathan fields that sell gas to Israel, Egypt and Jordan.
"We will successfully manage the fund in a professional and transparent manner with the aim of elevating the fund’s profits for state revenues and keeping them for the coming generations," said Krupalnik, who previously was global investment manager at the Menorah insurance firm.
($1 = 3.6546 shekels)
(Reuters -Reporting by Steven Scheer and Ari Rabinovitch; Editing by Emelia Sithole-Matarise)