A new target of 6 billion shekels: The dramatic move of the Keystone fund

The Keystone fund concludes the first half of 2026 with a leap in all key indicators, raising its 2030 equity target by 50% — from 4 to 6 billion shekels. The reports, published about a month after the fund remained out of the year's major energy deal, paint a picture of an infrastructure company that continues to grow even without the major acquisition it pursued.

At the end of July, Shikun & Binui signed the sale of its energy subsidiary to the Generation Capital fund at a valuation of about 4.5 billion shekels. Keystone, managed by Navot Bar, attempted to snatch the deal with a competing offer of about 4.35 billion shekels in cash, backed by a credit facility of up to 2 billion shekels. Despite a series of negotiations, Generation ultimately crossed the finish line.

For Keystone, this disappointment did not leave a hole in the reports. On the contrary, the fund continues to build its portfolio independently, actively developing its energy, communications, transport, and renewable energy arms.

The weighted return on equity before tax in the last twelve months jumped by about 71% to reach 31.2%, compared to 18.2% in the corresponding period. Equity grew by about 34% to total 3.1 billion shekels, and the NAV per share before tax rose by about 26% to 17.2 shekels, while the stock trades around 18.2 shekels.

The value of the investment portfolio expanded by about 23.5% to 4.737 billion shekels, while the net financial debt decreased by about 6% to 1.24 billion shekels, and the LTV remained low at approximately 26%.

In the quarter itself, Keystone recorded revenues of about 73 million shekels and a net profit of about 31.6 million shekels. The main growth stems not from current cash flow but from the increase in asset value.

Keystone's next engines are deals already in the execution stage. Through KComm, the fund acquired Hot Mobile together with Delek Israel and Leumi Partners at a valuation of about 1.2 billion shekels — a move approved by the Competition Authority in August. Simultaneously, the company is building a 40MW-IT data center campus at the IPM power station complex in Beer Tuvia, adapted for cloud and AI uses.

In the energy sector, KPower holds three active power stations with a total capacity of about 2,300 megawatts and is promoting a backlog of about 2,650 megawatts, including the Sorek station, expected to reach financial closing in the fourth quarter of 2026.

Keystone is traded on the Tel Aviv Stock Exchange and is held by institutional bodies, including many pension and provident funds. The company has distributed dividends continuously for 16 quarters, with about 71 million shekels distributed since the beginning of 2026.

The message for investors is that even a fund that lost a flagship deal can continue to create value, provided the promised growth engines materialize on schedule. The main caveat remains that a significant part of future value depends on projects not yet operational.

Additionally, Keystone notes it is examining an IPO for Egged after years of market anticipation, and does not rule out a similar move for its recent Hot Mobile acquisition.

Navot Bar, CEO of Keystone, stated:

"The Keystone machine is working on all fronts. We are not just managing infrastructure assets — we are developing them, improving them, and building new growth engines on top of them. The significant expansion in activity and potential of the portfolio allows us today to look forward with confidence and update Keystone's 2030 equity target to 6 billion shekels."

The new target reflects the next stage in Keystone's development — a transition from a platform based mainly on income-generating assets to a platform that actively creates new infrastructure assets. The moves we are promoting today will be reflected later in the books, and their maturation is expected to create significant value and increase the group's capital base over time.