Real estate investment fund Marathon completes a 750 million shekel raise for its second fund

The real estate investment fund Marathon is currently finalizing a 750 million shekel raise for its second investment fund. Originally, Marathon intended to raise 600 million shekels, but the amount was increased due to high demand.

Calcalist has learned that Migdal Insurance and Clal Insurance will serve as anchor investors, together providing half of the total raised amount. For both, this marks their first investment in Marathon's funds. In contrast, the Teachers and Kindergarten Teachers' Continuing Education Fund, which invested in the first fund, is participating in the current round alongside several prominent family offices. On behalf of Migdal Insurance, the investment was led by Tzachi Zanzuri, Real Estate Investment Manager, and on behalf of Clal Insurance, by Nir Delek, Real Estate Branch Manager.

The fund has a lifespan of eight years, with the option for two one-year extensions. The investment period is set for four years from the final closing date. The fund expects to finance up to 70% of each transaction's cost through leverage, with a target gross return of 20%. Management fees are 2%, and success fees are 20% for returns exceeding 7%, or 25% for returns of 12% or more.

Marathon is a real estate fund specializing in locating, acquiring, and improving complex assets in Israel. It operates on a model focused on identifying assets with planning, legal, environmental, or business complexities, acquiring them before their full potential is reflected in the price, and promoting zoning and regulatory changes to unlock value. Unlike traditional developers, the fund focuses on the improvement and planning stages, realizing assets after significant value-add.

Marathon was founded by Moti Kirschenbaum, who serves as Chairman, and managing partners Yuval Gayer and Itamar Giron. In 2021, the first fund raised 425 million shekels. Since its inception, the fund has acquired real estate assets worth approximately one billion shekels. According to an investor presentation, it has generated an internal rate of return (IRR) of 25%, including revaluations.

The first fund invested in 11 projects. The most prominent is the Delkol complex in Lod, where it acquired a 50-dunam polluted industrial site and rezoned it into a residential neighborhood of 1,530 apartments and 5,000 square meters of commercial space. Another notable deal was the 2023 acquisition of 18 dunams from the Hanan Mor company in Ness Ziona, where a plan for 275 apartments and 12,000 square meters of employment space is being promoted. In Kadima-Zoran, the fund acquired 45 dunams of agricultural land, converted for an employment and logistics park of 180,000 square meters. In Nahariya, the fund is developing the Lahavim complex (800 apartments on the beachfront), and in Ramat Gan, the Orda complex (206 apartments and 8,500 square meters of commercial and employment space).

With the launch of the second fund, Dor Ohana joins as a partner. Ohana has accompanied Marathon's activities from the beginning and was involved in key transactions and portfolio value enhancement.