For over two decades, Israel has been parading itself as the start up centre of the Middle East, encouraging overseas players to invest in technology, stocks and infrastructure in the Holy Land. For example, “foreign  investments in companies traded on the Tel Aviv Stock Exchange more than  tripled from 2012 to 2013″ to US$1.5 billion.

Yet it was the visit to Israel last week of the UK Prime Minister, David Cameron, which alerted observers to a more balanced flow of financial trade, especially with Europe.

Yes, Cameron won over many friends with his clever speech to Israel’s Parliament, the Kenesset. He also pledged a series of aid measures for the Palestinians. This included yet more UK taxpayers’ money to be channeled through UNRWA, a billion dollar a year project with no external audit.

What was new was the 70 million of investment into the UK pledged by Israeli private enterprise. The investment, which will create hundreds of UK jobs, including:

A £50 million commitment by Israel’s Noy Infrastructure and Energy Investment Fund to the UK’s renewable energy sector.

A £12 million investment by Israeli pharma company Teva in clinical development in the UK.

A £10 million investment by Israel-based AposTherapy in the UK in the next three years, creating hundreds of UK jobs.

As the two countries noted: “These announcements are testament to how the UK and Israel work successfully together. UK exports have grown steadily and we are now the third largest exporter to Israel and there are now over 250 Israeli companies operating in the UK.”

These are not isolated moves by Israeli companies. It was reported last month that “Israel’s institutional investors have sharply increased their holdings in overseas markets, which now represent 22% of assets under management at the end of last year, up from just 15% three years ago….. Among other foreign investments favored by Israeli institutionals were ETNs tracking European stocks and shares in emerging markets.”

So where has this paradigm shift come from? The fact is that while Israel’s economy has its problems, it is considered strong and solid. Through a stable banking system, it rode the global credit meltdown more successfully than most. It is developing an offshore energy industry. Add to that the financial benefits of Israel’s propensity to come up with great start ups, and you end up with a lot of new capital looking for a base overseas.

And that is why Europe is increasingly looking to tap into Israel’s emerging abilities in the money markets. Hundreds of millions stand to benefit from this new source of wealth in the Middle East.