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Israel: An Emerging Source of Institutional Capital
IMF data shows Israel’s GDP rising to $610.75 billion despite the war — powered by natural gas, defense, and high-tech. As institutional AUM expands and private-market allocations head toward 25% by 2030, the opportunity for global GPs is significant.
The world’s leading financial institution, the International Monetary Fund (IMF), has released its final data for 2025. According to the latest IMF data, Israel’s GDP has risen to $610.75 billion, up from $583.86 billion in April this year — a half-year surge of $27 billion, despite the ongoing war.
Three powerful drivers are fueling Israel’s economic growth, and their impact is expected to strengthen further:
Natural gas exports, positioning Israel as a regional energy powerhouse.
Defense exports, reaching unprecedented levels as global demand surges amid rising conflicts.
High-tech, once again emerging as a major engine of growth.
The Israeli economy has effectively neutralized the impact of war — and this during the longest and most intense conflict the country has faced since its founding. As a result, GDP per capita is soaring, surpassing $60,000 for the first time. Israel has doubled its GDP since 2010 and is projected to reach $72,000 per capita within a few years. With the highest natural population growth rate among OECD countries, Israel is already a very wealthy nation, and within five years it is likely to rank among the richest in the world.
Economic Growth Is Fueling Long-Term Savings
This economic vitality is mirrored in the expanding assets under management (AUM) within the Israeli institutional investment sector. This strong growth is fueling long-term savings and increasing the flow of capital into global markets.
Total AUM by institutional investors in Israel amounted to approximately NIS 2.75 trillion at the end of 2024 — an increase of about 15% compared with the end of 2023, representing an addition of roughly NIS 350 billion (compared with an increase of NIS 216 billion in 2023).
Against the backdrop of rapid population growth and rising GDP per capita — with Israel currently ranked among the top 20 countries worldwide — pension contributions are expected to continue growing and exceed redemption levels.
Israeli institutional investors are expanding their exposure to private market funds, currently around NIS 304 billion, with allocations expected to rise from 11% today to 25% by 2030. Total investments are projected to exceed NIS 1 trillion, reflecting annual growth of ~12%. This trend aligns the local market with global investment practices.
CARDO’s Perspective
Israel’s accelerating economic momentum and expanding institutional market create a powerful environment for GPs seeking long-term capital partnerships. Yet GPs often face challenges — navigating regulatory frameworks, understanding local investment practices, and establishing credibility with Israeli institutional investors. Here, CARDO’s expertise becomes indispensable.
Our high-conviction approach empowers our GPs to:
Enter the Market Strategically – Identify and engage Israeli institutions whose investment mandates align with fund objectives.
Navigate Local Regulation – Ensure full compliance with Israel’s evolving investment frameworks and governance standards.
Build Institutional Credibility – Position funds through transparent, high-quality investment narratives that resonate with local investors.
Leverage Established Relationships – Accelerate engagement through CARDO’s extensive network of pension funds, insurance companies, and investment managers.
Access Market Intelligence – Gain ongoing insights into allocation trends, emerging asset classes, and shifts in institutional demand.
CARDO’s deep local expertise ensures that every engagement is strategic, compliant, and impactful — translating Israel’s dynamic investment ecosystem into tangible growth for our GPs’ AUM.
Sources
Bank of Israel
International Monetary Fund, World Economic Outlook (October 2025) — IMF — Israel profile
