Despite not being the conventional choice for Middle East financiers, Exigent Capital Group, an investment fund, has recently established its third office in the region, located in Manama. The fund’s other offices are situated in Jerusalem and Tel Aviv.
To commemorate its expansion into the Gulf, the Israeli financial firm has enlisted Talal al-Zain, former executive director of the Bahraini sovereign wealth fund, as its partner and chief investment officer.
During his tenure at Mumtalakat, where he served as the founder and director of Jisr Capital — a consultancy firm for companies and financial entities based in Bahrain — Zain successfully managed a portfolio valued at over $10 billion.
Since the signing of the Abraham Accords in 2020, which marked the normalization of relations between Israel and Bahrain, the focus of cooperation between the two countries has primarily been on security matters.
However, when it comes to bilateral economic ties, progress has been slower compared to the relationship between Israel and the United Arab Emirates, which normalized their relations slightly earlier.
While a free trade agreement between Israel and the UAE came into effect on April 1, Bahrain and Israel have yet to finalize similar negotiations. Given this context, it is somewhat surprising that the Israeli investment company chose not to open its first office in the Gulf in Dubai, the financial hub of the UAE.
The small kingdom of Bahrain is known for its strong ties with its influential neighbor, Saudi Arabia. The signing of the Abraham Accords would not have been possible without Riyadh’s consent.
Elie Brender, the founder and CEO of Exigent Capital Group, has expressed his company’s intention to explore investment opportunities in countries within the region that have not yet normalized relations with Israel. There are even discussions about the potential of establishing an office in Saudi Arabia, as Bloomberg reported.
Zain, taking it a step further, envisions the potential of Israeli technologies in fostering economic connections between Israel and the region, ultimately leading to mutual economic benefits for all parties involved, according to the same media outlet.
Abraham Accords and other normalization of ties
In 2022, the Jerusalem-based investment fund enlisted Ron Dermer as a partner, prior to his return to political service as the minister of strategic affairs in Benjamin Netanyahu’s government, which was announced in December of the same year. Dermer, a former Israeli ambassador to the United States, is renowned for his role as a crucial intermediary with Arab nations and as one of the key architects behind the Abraham Accords.
Amid the United States’ efforts to encourage diplomatic relations between Israel and Saudi Arabia, the latter has presented conditions that pose challenges when it comes to gaining Washington’s acceptance. While the Palestinian issue is emphasized as a crucial concern, Riyadh primarily seeks security assurances from the Americans. Additionally, Saudi Arabia desires assistance in advancing its nuclear program and the removal of restrictions on arms sales to the kingdom.
Despite the announcement of normalization with Iran on March 10, brokered by China, the Islamic Republic and its regional allies are still perceived as a significant threat in the region. This perception is particularly prevalent in Bahrain, where the majority of the population is Shiite. Bahrain was the only Gulf country to witness popular demonstrations during the Arab Spring, which were met with severe repression.
The Bahraini government accused Iran of instigating the protests against the Sunni ruling al-Khalifa dynasty. While Bahrain has reluctantly moved closer to Tehran in recent months — following Saudi Arabia’s lead — its normalization with Israel was primarily motivated by a desire to counter the Iranian threat in the region.
In February, a bilateral agreement was unveiled, designating Bahrain as the first Arab country to officially host an Israeli military official. The Wall Street Journal reported that Manama has requested training for its agents from Israel’s internal and external intelligence services, namely the Shin Bet and Mossad. Additionally, Israel is supplying Bahrain with drones and anti-drone systems.
It is worth noting that Bahrain is home to the US Fifth Fleet, which operates in the Arabian Gulf. The fleet’s responsibilities encompass safeguarding shipping in the nearby waters, a region in close proximity to Iran.
This article was originally published in French in L'Orient-Le Jour. Translation by Sahar Ghoussoub.