Jared Kushner's $3bn investment fund bet on an Israeli auto firm with links to a company making missile boats for Israel's navy

Saudi Arabia, the UAE and Qatar have invested in an Israeli company linked to Israel’s military as part of their involvement with the investment fund of former senior foreign policy advisor under Trump Jared Kushner, underscoring the tangled political and economic interests between Kushner, Israel and Gulf monarchies.

The link comes from a $150m stake Kushner's Miami-based Affinity Partners purchased in the auto services unit of Israel's Shlomo Group. 

The family-owned conglomerate's interests extend well beyond the auto industry to construction, real estate, and shipbuilding. Shlomo Group’s parent company, Shmeltzer Holdings, is part owner of Israel Shipyards, the only domestic shipbuilder for the Israeli navy which constructs Sa'ar 4.5-class missile boats.

In an interview with The New York Times published on Tuesday, Kushner said he didn’t invest in the naval part of Shlomo Group’s business. The Israeli company wants to extend the car leasing part of its business to the Gulf, with an eye on Saudi Arabia, Asi Shmeltzer, the company’s chairman, told The New York Times. Shmeltzer serves on the board of Israeli Shipyards.

Kushner launched Affinity Partners after Trump left the White House in 2021, following a stint as a senior advisor to his father-in law. The speed with which Kushner was able to build his $3bn fund raised eyebrows in Washington and the investment community. Kushner played a leading role in advising Trump on Middle East policy and pushing for the Abraham Accords.

Saudi Arabia invested $2bn in Kushner’s fund under the direction of Crown Prince Mohammed bin Salman. The United Arab Emirates and Qatar invested $200m each, according to The New York Times. An Affinity Partners financial disclosure in March showed that 99 percent of the funds given to the firm were from foreign investors.

99 percent foreign funds

The UAE normalised ties with Israel under the Abraham Accords. The Biden administration was pushing to secure a normalisation deal with Saudi Arabia just before the Hamas-led 7 October attacks on southern Israel and the subsequent Israeli invasion of Gaza.

None of the states that signed the Abraham Accords - Morocco, Bahrain or the UAE - have severed ties with Israel.

Meanwhile, Jordan has had to push back allegations that it is allowing Israel to bypass the risk of attacks on shipping in the Red Sea, by Houthis in Yemen, via a land route.  

Qatar maintains unofficial relations with Israel and has taken the lead, along with Egypt, in mediating between Hamas and Israel. The unofficial ties between Doha and Israel have been stretched over Gaza, with Israel moving to ban Qatar’s government-funded Al Jazeera news network and Doha’s relations with Hamas drawing scrutiny.

Kushner has worked on soft diplomacy between Israel and Qatar. Axios reported in December that he arranged a lunch in New York City with the prime minister of Qatar and Jewish business leaders, including the outspoken antisemitism campaigner Bill Ackman. The head of Pershing Square Capital Management has invested heavily in Israel's stock market amid the war in Gaza. 

Kushner’s fund has been especially picky in deploying its capital. It has made just 10 investments to date, worth around $1.2bn, mainly overseas. With money from Gulf states Kushner has invested in a Dubai-based online real estate advertising company, a California-based solar lending site, and a German gym equipment company.

The fund’s biggest bet has been on Balkan tourism, with bets that could surpass over $1bn for a hotel and condominium complex in Serbia and luxury resorts on Albania’s Adriatic coast.