Smart Agro 2025: What the parent really has left after management fees and the securities bridge

What This Follow-Up Is Isolating

The main article already framed the gap between Smart Agro's reported NAV and the value that is actually reachable at the listed-vehicle level. This follow-up isolates only the liquidity layer at the partnership itself, before getting back to what the portfolio companies may be worth on paper. The reason is simple: the numbers that make up the liquid bridge still look reasonable at first glance at year-end 2025, but they compress quickly once accrued management fees are pulled in and once it becomes clear that the tradable-securities book has already served as a funding source for the partnership.

That is the core point: on December 31, 2025 the partnership held NIS 445 thousand of cash and cash equivalents and NIS 6.313 million of tradable securities. That creates a gross liquid pool of NIS 6.758 million. But against that same pool it was already carrying a current liability of NIS 1.366 million payable to the general partner for management fees, while total current liabilities stood at NIS 1.732 million. So the real question is not how much the portfolio is worth in the accounts. The real question is how much cash and marketable liquidity is still left at the partnership after the corporate layer is paid for.

That distinction matters because the balance sheet still looks rich on paper. Total assets stood at NIS 24.641 million, equity at NIS 22.909 million, and investments in portfolio companies at NIS 17.754 million. But that is exactly where the misread begins. Most of the assets sit inside non-tradable portfolio holdings. The immediately accessible liquidity layer is much smaller, and it is the layer that has to fund ongoing activity, management fees, and any further decision to keep supporting portfolio companies.

What Is Actually Liquid, And What Only Looks Liquid

The liquidity section in the board report helps explain why it is wrong to treat the full NIS 445 thousand cash balance as freely available operating liquidity. Out of that amount, NIS 193 thousand sat in current bank balances and NIS 252 thousand sat in short-term bank deposits. The report then adds a crucial distinction: the deposits are intended mainly for investments in existing and additional target companies, while the current-account balances are intended to fund ongoing activity over the next 12 months.

That is not a side note. It is an admission that even within the reported cash balance there is already a split between an operating layer and an investment-oriented layer. A reader who looks only at the headline cash line can easily conclude that the partnership has almost NIS 0.5 million of operating flexibility. The partnership's own framing is narrower: the layer described as supporting ongoing operations is just NIS 193 thousand.

The securities book fills in the rest of the picture. It stood at NIS 6.313 million at the end of 2025, down from NIS 7.8 million a year earlier, and it consists mainly of highly rated corporate bonds. That does make it a real level-1 liquidity layer, but it is still not the same thing as cash already sitting in the account. To use it, the partnership has to sell it, and the cash-flow statement itself classifies those flows within investing activity rather than operating cash generation.

The chart makes clear what the balance sheet alone can hide. Between the end of 2024 and the end of 2025, cash fell by 72.8%, the securities book declined by 19.1%, and current liabilities more than doubled. At the same time, the non-tradable portfolio-investment layer still represented 72.1% of total assets. In other words, the partnership did not enter 2026 with a stronger liquid bridge. It entered 2026 with a thinner liquid bridge while the illiquid portfolio layer still dominated the reported asset base.

Management Fees Are Part Of The Bridge, Not Noise Around It

This is where the real test of the liquid pool begins. The partnership agreement gives the general partner management fees of $25 thousand per month plus VAT. In December 2024, the unitholders approved an arrangement extending the deferral of half of those management fees until the first initiative-fee payment. The same arrangement also allows the general partner, starting in 2025, to cancel the deferral going forward and demand full payment if further new investments are not approved or if the partnership's market value rises above $10 million.

The practical effect is already visible on the balance sheet. As of December 31, 2025, the partnership carried a current liability of NIS 1.366 million payable to the general partner for management fees. The board report states explicitly that this balance includes the provision for the fourth quarter of 2025 and the deferred half of management fees under the arrangement approved on December 8, 2024. In other words, the fee burden did not disappear because payment was deferred. It accumulated on the balance sheet.

Both Regulation 21 and note 17 make the same broader point: the general partner remains a material claimant on the partnership's liquidity layer. In both places, 2025 includes NIS 1.088 million under management and initiative fees to the general partner. That is not a theoretical number. It is the number that explains why management fees belong inside the liquidity read, not in a separate governance drawer.

That bridge shows why it is misleading to equate "cash plus bonds" with "available liquidity." Accrued management fees alone equal 20.2% of the gross liquid pool and are 3.1 times larger than the year-end cash balance. After the rest of current liabilities is deducted as well, the remaining liquid pool comes down to NIS 5.026 million. That is still a real number, but it is already far tighter than the simple headline read of "NIS 445 thousand of cash plus NIS 6.313 million of securities."

2025 Already Showed Who Funded The Vehicle

The common mistake would be to treat the securities portfolio as a passive backstop that can simply be left untouched. The 2025 cash-flow statement says the opposite. Operating activity consumed NIS 1.559 million. Financing activity contributed nothing. At the same time, investing activity produced NIS 370 thousand of cash, but only because net sales of securities amounting to NIS 1.732 million offset NIS 1.462 million of investments in portfolio companies and NIS 100 thousand of cash interest received.

That is the easiest number to miss. In 2025 the partnership did not raise fresh equity to fund itself, yet it still ended the year with positive cash. The bridge ran through securities sales. So the bond book is not just another asset sitting next to the venture portfolio. It already functioned as the liquid bridge through which the listed vehicle funded itself during a year with no external financing inflow.

That also sharpens the correct reading of the liquidity section. When the report says current-account balances are intended to fund the next 12 months of ongoing activity, it is not pointing to a wide operating cash cushion. It is pointing to a narrow operating layer sitting inside a partnership that already showed in 2025 that it converts tradable assets into cash in order to keep moving.

Follow-On Support Sits On The Same Pool

The picture gets tighter from here. The same liquid pool does not only face management fees and corporate overhead. It also still sits opposite follow-on decisions in the portfolio. In December 2025, the partnership signed an additional $250 thousand investment in Arugga, of which $150 thousand was invested near signing while another $100 thousand is due at a future date under the investment agreement. That is no longer an abstract idea about possible support. It is a live investment path with one funded leg and another leg still open.

SupPlant adds another example. On December 30, 2025, the partnership invested another $150 thousand through SAFE, and in the same transaction received rights to purchase additional SupPlant shares on the terms of that SAFE raise in an amount equal to the additional investment. That is a right rather than an obligation, but it still shows that follow-on support remains a live option at the listed-vehicle level.

This does not mean every shekel in the liquid pool will be deployed tomorrow morning. The conclusion is narrower, and more important: the same pool cannot receive double credit. The securities book cannot simultaneously be treated as a clean backstop for corporate liquidity, as the source from which accrued management fees will eventually be paid, and as unlimited dry powder for follow-on portfolio support. It is one gross pool of NIS 6.758 million, and every serious liquidity reading has to start from that fact.

Conclusion

The message of this continuation is simpler than it first appears. Smart Agro does not trade only against the marks placed on its portfolio. It also trades against the question of how much of that value is actually reachable at the listed-vehicle level. At the end of 2025 the partnership had NIS 6.758 million of cash and tradable securities, but after management fees payable and total current liabilities, the liquid pool was down to NIS 5.026 million before any fresh follow-on decision.

That is where the market layer comes in. On April 3, 2026 the partnership's market value was about NIS 6.4 million. In other words, the market value sits much closer to the gross liquid pool than to the broad accounting NAV. That makes far more sense once it is clear that the securities book has already served in practice as a funding source for the vehicle, and that the same book also stands behind the accrued fee layer and the option set for further portfolio support.

The strongest counter-thesis is that this read may be too conservative because the securities portfolio is real, tradable, and level 1, mostly invested in highly rated corporate bonds. That is partly true. The problem is not that the bonds are trapped value. The problem is that they are already being asked to do more than one job at once. So the right conclusion is not "there is no liquidity." The right conclusion is that liquidity is materially narrower than NAV suggests.

What changes the read from here will not be another valuation move at one portfolio company. It will be an event at the partnership itself: a fresh capital raise, a reduction in the accumulated fee layer, another sale of securities that extends runway without weakening flexibility, or a new claim on the same pool through further portfolio support. Until then, the right way to read Smart Agro is not through NAV alone, but through the question of what really remains after the general partner and the securities bridge are both pulled through the same cash equation.