Jerusalem Venture Partners has raised $350 m (£246 m) of a targeted $500m for its latest fund, JVP IV, which is set to close at the end of September.

The new fund is expected to make more investments in Europe and the US than its predecessor funds.  JVP expects 40 percent of the fund to be invested in Israel, 40 per cent in Europe.  It will target the optical networking, data and wireless communications, e-business infrastructure, and internet infrastructure sectors.

The fund raising was made more difficult by the region's military conflict, and by Israel's policy of double taxation on foreign investors.  However, JVP said the firm's track record and international focus attracted investors, including France Telecom, Boeing, AXA, Nortel Networks, MIT, and Reuters.

Etan Hillman, general manager of the Israel Venture Association, said some investors are withholding substantial amounts of capital allocated to Israel because of the double taxation problem. He added that it has also encouraged Israeli venture funds to look further afield.

Gerald Segal, managing director of Bear Stearns in Israel, said capital will go where its use is "most efficient", which could mean to Europe if the tax authorities do not change the double taxation policy.  Despite this, JVP Margalit said that more than half of JVP's investors came from Europe.

Successful exits for JVP include the $4.5bn sale of Chromatis Networks, where it held 15 per cent, to Lucent, and a Nasdaq float of Netro, which exited with a return multiple of 150 times cost.