Grandstanding Traction

Are you attending the 3rd Annual Executive Briefing on Private Equity and Environs in Turkey?

2017-12-06T19:48:00.000+03:00

Informative Link: https://www.empea.org/events/3rd-annual-executive-briefing/#agenda

Happy to hear your thoughts on the event in the comments. There is a healthy array of speakers here - and if you are new to Turkey's VC/PE scene - this would be a good primer. But trust me, you can skip the Keynote. It's not him, it's you who will make entrepreneurship, innovation and the VC space succeed. Go enjoy a coffee, tea and dessert in the lobby of the Swissotel Bosphorus and enjoy the view!

Agenda:

Grandstanding Traction in Need of Update - Asking for Contribution

2012-09-06T08:07:00.000+03:00

Hello World!

A lot of water has flowed under the Bosphorus Bridge since my last post. I feel I may have left some of you in a quandary (or not) as to my whereabouts or as to the status of Grandstanding Traction. Let us just say that children have an interesting way of slowing down your life and its direction, in addition to a move State-side - the bay area of San Francisco.

Needless to say, I never felt like I needed to shut down the blog, as I still feel that some of the links to various Turkish VC and Private Equity organizations are in dire need from outside Turkish borders and to be located in one place with pivotal news of the region. In addition, most of my posts attempted to accumulate as much factual evidence in the news concerning the particular PE/VC event of the day, and is still a useful resource for the proper timeline of history and for posterity.

So, in this post, I turn to you - the reader. I need your help in updating Grandstanding Traction. Since my last post, I'm sure a lot has changed, improved, been built, or failed during my hiatus. Consider this a sort of wiki. I ask you to fill me in. If you know of any organization that should be listed here or should no longer be listed here, I urge you write in, leave a comment in the comment thread, and help me update the site. What Turkish VC funds have been established? What conferences are soon to be held in Turkey or neighboring countries? What vast private equity deal, VC funding or fund establishment has changed the landscape of the Turkish entrepreneurial environment? What of the Technoparks? How has the Turkish economy changed in the last decade, or has it?

For a quick refresher, see Grandstanding Traction's original thesis - my first post. Also, for a quick history lesson, a quick Google search reveals this essay by Venturing Mind.

Once again, please let me know of any changes and updates of VC/PE firms in Turkey to the current Turkish environment. Please let me know if you have an upcoming event, business idea, or partnership idea that you would like to see posted live. As well, if you would like to get in touch, my usual contact information is in the right sidebar. Many best regards towards the future.

2nd Annual Private Equity International Turkey Forum - September 22-23

2010-07-28T12:18:00.006+03:00

Finally pulling together all the major players in the Turkish private equity space last year (as reported on this site), it appears that EMPEA and PEI are doing it again - The 2nd Annual PEI Turkey Forum. This is really the largest "who's who" event that has ever happened in Turkey for this high potential space. (Dimiter, hope it worked out well for you last year.) I mean, look at this list of speakers:

Amjad Ahmad, Senior Managing Director, Alternative Investments, NBK Capital
Meltem Akol, Partner, White & Case
Sarah Alexander, President, EMPEA
Ozgur Altan, Investment Manager, European Investment Fund (EIF)
Meltem Ankara, Senior Banker, European Bank for Reconstruction and Development (EBRD)
Isak Antika, Co-Founder & Managing Partner, Actera Group
Kathleen Bacon, Managing Director, HarbourVest
Jean-Philippe Burcklen, Head of Lower Mid-Market, European Investment Fund (EIF)
Dr. Mete Çakmakcı, Secretary General, Technology Development Foundation of Turkey
Jennifer Choi, Director of Research, EMPEA
Serkan Elden, Managing Director & CEO - Eurasia, PineBridge Investments
Ercan Ergul, Managing Director, Bedminster Capital Management
Mete Ikiz, Investment Director, NBGI Private Equity
Tolga Işmen, Managing Partner, Ismen
Ralph Jaeger, Senior Research Consultant, Cambridge Associates
Amanda Janis, Senior Editor, Private Equity, PEI Media
Yalin Karadogan, Principal, Cinven
David Nieuwendijk, Senior Investment Officer Private Equity, FMO
Murat Özgen, Chief Executive Officer, İş Private Equity
Frank Roccogrande, Partner, Bilgili Holding
Mehmet Sami, Executive Board Member, ATA Invest
Selim Selimata, Manager - Project & Acquisition Finance, Garanti Bank
Onur Takmak, Principal, RHEA Investments
Seymur Tari, Managing Director, Turkven
Sasha van de Water, Managing Director, Keyhaven Capital Partners
Memet Yazıcı, Managing Director, Private Equity, Rhea Asset Management
Selcuk Yorgancioglu, Executive Director & Turkey Country Head, Abraaj Capital
Can Yucaoglu, Director, Turkven Real Estate

Incredible! Truly, what a great event this will be. While I can't imagine there is really that much to say about Turkey, the presence of such brain power and "pro-invest-Turkey" spirit will certainly be there. And it should be, because all tickets for institutional investors are FREE! (As is always the case at such events). Just curious, would anyone like to sponsor me to go to this event? I'd like to go. Maybe I could get a press pass? Hmmm....well anyway, let's hope this means that more inflow of private equity is able to enter Turkey and continue to grow this country to its potential.

RHEA Investments Acquires Stake in Turkey’s first fully integrated solid waste and energy company, Envitec Ltd.

2010-06-02T12:58:00.004+03:00

To finish the trio of investments for RHEA Investments so far in 2010, RHEA acquires a 33% stake in Turkey’s first fully integrated solid waste and energy company, Envitec Ltd. Envitec has a 25-year Build-Operate-Transfer concession in a 27 municipality region on the Mediterranean Coast of Turkey. The investment will reach $7 Million in 2010.

Onur Takmak, Chairman of the Board for Vakıf Girisim and Chief Executive Officer of RHEA Investments stated "Natural resources, clean infrastructure and energy are focal points of our investment targets. Vakıf VCIT will continue investing in leaders with the right technologies and with the right implementation projects in Turkey. We are excited to work with partners including Enviro Metall GmbH, Kanyol Construction and Biodegma GmbH to leverage their extensive experience in environmental technologies and projects. Envitec will build a strong brand and become a regional leader in waste management."

Ali Rıza Serter, Chairman of the Board for Envitec, expressed that Iskenderun Area Municipal Solid Waste Project will be the first project in Turkey designed single-handedly end-to-end with a clean environment and European Union guidelines in mind. Serter said "We will be proud to serve a very fast growing population of more than half a million residents for 25 years. Envitec is excited to partner with RHEA and Vakıf Girisim to complete this showcase project and expand to other regional municipalities."

Memet Yazici, Head of Asset Management, RHEA Investments and Board Member for Vakif Girisim commented "With our partnership, Envitec will complete a $35 Million infrastructure investment in the first phase. This investment will cover the daily collection of 600 tons of solid waste per day; separation of recyclables; sterilization and elimination of medical waste; production of organic compost material; flash-drying of municipal waste water treatment products; and managing the landfill for the remaining solid waste. The second phase will also add one of Turkey’s largest organic fertilizer plants and an energy production plant from landfill methane. This is a showcase project focused on maximizing the solid waste re-use and finding the cleanest waste management solutions."

Cem Baytok, Director of Energy Investments for RHEA, mentioned that Envitec has been managing a profitable waste collection operation in the region. Following the investment period the project will generate cash flow equivalent to a 100 MW wind energy generation plant. Baytok added that the clean energy production of the project will be enhanced with additional follow-on investments.

Envitec was founded in 2009 after winning the tender for the Build-Operate-Transfer Solid Waste Management and Energy Generation project for the Iskenderun Region of Turkey consisting of 27 municipalities. Founding partners of Envitec include Enviro Metall GmbH, a Stuttgart-Germany firm focused on clean environment projects; Kanyol Construction Inc of Turkey, and Biodegma GmbH of Germany.

RHEA Investments Takes Stake In Netsafe Information Technologies - a leading Turkish independent asset management platform

2010-06-02T12:29:00.005+03:00

January 2010

The second of three investments in 2010 for RHEA Investments, RHEA announced that they had acquired a 60% stake in Netsafe Information Technologies of Istanbul, Turkey. Netsafe is Turkey’s fastest growing Network Security Unified Threat Management (UTM) appliance manufacturer. The proposed transaction values Netsafe at approximately $1 Million US Dollars.

Netsafe, based in Istanbul, Turkey, serves more than 150 small to medium enterprises in Turkey and exports its products to the Middle Eastern and Eastern European countries. Netsafe was founded by Cüneyt Kalpakoglu, an experienced information security expert and former veteran of IBM in Turkey.

Onur Takmak, Chairman of the Board for Vakıf Girisim and Chief Executive Officer of RHEA Investments added "We selected Netsafe as our initial investment in information security. We will be looking to expand our investments in products and business in telecommunications, information technology and internet applications with a global vision".

RHEA Investments Acquires Majority Stake in SETA Medical Products

2010-06-02T12:08:00.007+03:00

January 2010

The first of three investments in 2010 for Rhea Investments, SETA is Turkey’s leading manufacturer of disposable medical products, including disposable surgical drapes and gowns, and custom procedure trays. The proposed transaction values SETA Medical at $4.6 million.

Onur Takmak, Chairman of the Board for Vakıf Girisim and Chief Executive Officer of RHEA Investments announced "Disposable medical products are a global $75 Billion market poised for strong growth. SETA represents the leading edge of value added healthcare products and is our initial investment in innovative healthcare companies with regional and global growth aspirations".

Oguz Dagli, Chief Executive Officer of SETA Medical since 2005 commented "With this investment and partnership with RHEA, we are planning to grow our market share and our healthcare logistics capabilities exponentially targeting the Western European market".

Bancroft Invests in Leading Turkish Coatings Group Kayalar Kimya

2010-04-30T01:07:00.008+03:00

January, 2010

Bancroft Group, a private equity firm, is investing an undisclosed amount in Kayalar Kimya, a leading Turkish coatings group. The investment will be made through the private equity firm's third fund, Bancroft 3, which is targeting total commitments of EUR250 million for investments in Central and Eastern Europe as well as Central Asia and the Caucasus.

Kayalar Kimya is a Turkish producer and a market leader for a wide range of wood and decorative coatings and distributes a wide range of specialty chemicals. The company was founded in 1976.

Other Turkish investments from the Bancroft Group include:
September, 2006 - Standard Profil A. S., tier-one rubber profile and weather-strip manufacturer for European and Turkish car manufacturers.

July, 2007 - Eko Finans Factoring Hizmetleri A. S., a factoring services provider in Turkey with 15 branch offices countrywide, focusing on small to mid-sized enterprises.

Bancroft is a US private equity firm that has been active exclusively in the region of Eastern Europe since 1989

The Carlyle Group Acquires 40 Percent of Turkey's Medical Park Hospitals

2010-04-30T00:37:00.009+03:00

December, 2009

According to the Carlyle Group press release, Global private equity firm The Carlyle Group today announced it has acquired a 40 percent stake in Medical Park Sağlık Hizmetleri A. Ş., Turkey's second largest healthcare services company. The founding shareholders, the Sancak and Usta groups, will remain as significant investors in Medical Park. Carlyle's all-equity investment will be used primarily to finance the hospital company's continued expansion and reduce debt. Additional financial details were not released. The transaction closed on December 7, 2009.

Can Deldağ, Carlyle Managing Director and Head of the Turkish investment team, said, "We, as Carlyle, are very pleased to invest in a strong, growing company like Medical Park. The Turkish healthcare services sector shows great promise as patient demand for services has been high and is expected to grow steadily."

Medical Park (www.medicalpark.com.tr)was established in 2005 with two existing hospitals based in Istanbul dating from the mid-1990s. Through the development of new hospital projects in leading cities in Western Turkey, and the acquisition of single hospitals based in North and East Anatolia, Medical Park now owns and operates 13 hospitals with 2,000 beds as of 2009. Medical Park provides a diverse range of healthcare services with 800 physicians, 1,600 nurses and 2,800 support personnel.

Equity for this investment, Carlyle's second in the MENA region, will come from Carlyle MENA Partners, a $500 million growth capital and buyout fund that closed in March 2009.

Abu Dhabi's Invest AD Invests in Ekol Lojistik

2010-04-30T00:21:00.006+03:00

November 2009

According to Invest Ad's press release, Abu Dhabi's Invest AD Invests 50 million Euros in Turkish Logistics Firm, Ekol Lojistik.

Abu Dhabi-based Invest AD is acquiring a significant minority stake in Ekol Lojistik, one of Turkey’s leading integrated logistics companies, for approximately 50 million Euros. The investment will be the first made through Invest AD Private Equity Partners II.

Invest AD's private equity fund, which aims to raise $400 million, is investing in fast growing companies in the Middle East and North Africa region, with a strong focus on Turkey, Saudi Arabia, Egypt and the United Arab Emirates.

EKOL, established in 1990, owns and operates 1,100 vehicles and 16 warehouses in Turkey and one cross-dock facility in Germany. Its team of 2000 people serves a long list of international and national blue-chip clients. The company offers integrated logistics services which include transportation, warehousing, foreign trade consulting and exhibition logistics and a number of value added services.

European private equity firm Bridgepoint takes joint controlling stake in Turkish vehicle inspection group TüvTurk

2010-04-29T23:51:00.009+03:00

October, 2009
Bridgepoint PE's presence in Turkey, which is really the managed footprint of the old AIG Blue Voyage Fund, appears to have made an active contribution in Turkey, the stalwart survivor of the crisis, and has established their office in Turkey. According to the Bridgepoint press release in October 2009, European private equity firm Bridgepoint has taken a joint controlling stake in Turkish vehicle inspection group TüvTurk in the largest private equity investment in Turkey so far. Details of the deal were not disclosed, but reports in September 2009 estimated a stake of 33 per cent.

The company operates 189 stations across the country and has franchised its operations across 81 regions to 46 franchisees with TüvTurk shareholders retaining ownership and operation in Istanbul, the company’s largest region. Tüvturk is licensed to operate roadworthiness centres across Turkey until 2027, and owns three city franchises: Tüvturk Kuzey, Tüvturk Guney and Tüvturk Istanbul.

The investment was made through Bridgepoint's €4.85bn Bridgepoint Europe IV fund.

This investment appears to be nice medium tier investment for a government subsidized business with guaranteed franchise rights for long duration. Very low competition and tests are required by law for all vehicles in Turkey.

Arda Kutsal's Webrazzi is now in English!

2009-09-25T15:25:00.006+03:00

Yes! For all English-speaking, technically-minded, gifted entrepreneurs as well as deal flow optimizers, VCs and angel investors for the Turkish market, good news has finally come - Webrazzi is now in English.

The "Techcrunch" of Turkey has been providing daily updates on the Turkish technology and startup scene since 2006. Arda Kutsal's very successful brain child Webrazzi appears to be doing well enough that he has finally branched out to the English speaking world - now called Webrazzi Global.

For those interested, the new link is:
Webrazzi Global
http://en.webrazzi.com/
Check it out!

AIG Unties Turkish Blue Voyage Fund

2009-09-25T13:21:00.010+03:00

At the beginning of September, a contact from AIG sent a press release concerning the AIG Blue Voyage Fund - Turkey. As we all know, AIG has had some trouble of late, and it only seems natural that they should streamline their operations. Per the press release:

American International Group, Inc. (AIG) has announced an agreement to sell a portion of its investment advisory and asset management business to Bridge Partners, L.P., a company owned by Pacific Century Group (PCG), the Hong Kong-based private investment firm. AIG is retaining its in-house investment operation that oversees approximately $480 billion of assets under management.

The purchase price of approximately $500 million consists of a cash payment of approximately $300 million at closing, plus additional future consideration that includes a performance note and a continuing share of carried interest.

"After conducting an extensive and rigorous auction process, we concluded that this transaction provides fair value for AIG and achieves the greatest long-term stability and potential for the business, its clients, business partners and employees," said Alain Karaoglan, AIG Senior Vice President - Divestiture.

The units being sold operate in 32 countries and manage approximately $88.7 billion of investments of institutional and retail clients across a variety of strategies, including private equity, hedge fund of funds, listed equities and fixed income. Win J. Neuger will continue as Chief Executive Officer of the new business and the existing management team will remain in place.

This transaction includes the Blue Voyage Fund. Managing Director Serkan Elden remains at AIG Investments. The Blue Voyage Fund link has been removed from the Index.

For other Grandstanding posts regarding AIG and the Blue Voyage Fund, click on the labels below.

RHEA Investments Joins with Stowbridge Partners; Purchases Vakif VCIT Shares

2009-09-25T11:02:00.012+03:00

RHEA Investments, a London-baseded private investment and project development company in the fields of real estate, health, energy, agriculture, and financial services, has made a few moves in the last month that should position it for permanency in the Turkish environment. RHEA Investments established a foothold in Turkey in 2006 and have made successful investments on a MediaMarkt project in Izmir as well as continuing development of hotel projects in various Turkish cities.

Posted about a month ago on the Linkedin group - Venture Capital and Private Equity in Turkey, Memet Yazici, group leader Head of Asset Management at Rhea Investments, makes two announcements regarding the future direction of Rhea Investments. First and foremost last month, RHEA Investments announces that it has joined forces with Stowbridge Partners. According to the post:

"Stowbridge Partners and RHEA Investment Group are joining forces to launch a venture capital and private equity management as well as a corporate advisory unit under the RHEA name. Accordingly, Stowbridge venture capital management and corporate finance advisory practices will merge with the RHEA team.

The new entity will combine the strength of RHEA’s business in the real estate, energy and healthcare sectors with the Stowbridge Partners’ extensive experience in Venture Capital and Small/Medium Enterprise Private Equity. Both teams share the same vision to produce superior returns and the same dedication to excellent execution.

RHEA’s primary office is located in Istanbul, Turkey with additional offices in London (UK) Chicago, Illinois (US), Bucharest (Romania), Izmir (Turkey) and Dubai (UAE).

At Stowbridge Partners, managing partner Kurtay Ogunc will continue his leadership and identify new opportunities for cooperation and collaboration between U.S. and the EMEA region.

About a year ago, Stowbridge Partners was taken off Grandstanding Traction's index (right sidebar) due to inactivity, or rather "off the radar". As of this announcement, they have been added again. Memet Yazici is also a board member of Stowbridge Partners.

Days after, RHEA Investments made another announcement regarding its agreement to purchase 31.15 percent of Vakıfbank's private equity operation Vakıf Venture Capital Investments Trust.

As mentioned in the Hurriyet Daily News, "The 2.1 million Turkish Liras deal is pending the approval of Turkey's Capital Markets Board, or SPK, and is likely to be finalized by the end of 2009. Vakıf Venture Capital Investment Trust was established in 1996 and listed on the Istanbul Stock Exchange in July 2000."

According to Memet Yazici on Linkedin, "RHEA has signed a definitive agreement with Vakif Bank to purchase all of the A type (controlling) and 6.15% B type (ordinary) shares of Vakif Risk Sermayesi Yatirim Ortakligi A.S. (Vakif Venture Capital Investment Trust), an Istanbul Stock Exhange listed joint stock company (stock code: “VKFRS” ). All of the remaining shares are trading on the ISE."

As quoted in the Hurriyet, "We will be particularly interested in cooperating with sector leaders, firms that are already first or second in their respective sectors, which have an ambitious global growth vision. Our goal is to grow the firms and exit them in some two to four years, like an average private equity investor would do," Yazıcı said. Rhea has already screened some 25 firms looking for an investment between 5 million and 20 million euros. "In addition to this, motivated by the construction of technoparks in Turkey in recent years, we are also planning to build a technology portfolio of some five companies," said Onur Takmak, Rhea Investment venture capital director.

Additional information can be obtained at: The New Energy World Network - Turkish renewable energy investment trust Rhea Investments acquires Vakif Risk Sermayesi Yatirim Ortakligi

Invest IQ - RHEA Buys controlling Share of Vakif Venture Capital

Rhea comes to Turkey with international corporate investors (TR)

Overall, this looks like a nice consolidation of the industry with some good heads at work. Vakif Girisim was looking to unload this subsidiary for some time now. In fact, Grandstanding Traction posted in 2008 an interview with CFK Partners who were intending the purchase the Vakif Girisim shares. CFK Halka Arz Partners website is still under construction, so this deal appears to have fallen through.

Private Equity International Turkey Forum set for November 2009 in Istanbul

2009-08-14T11:35:00.010+03:00

That's right, this is the latest news about a very significant event. Scheduled for November 23 and 24 at the Hyatt Regency in Istanbul, Private Equity International and EMPEA are coordinating a Turkey Forum with the main sponsors being Turkven, the Actera Group and Abraaj Capital. Endeavor is also supporting the event. I know Golden Horn Ventures tried to do something like this a year ago, and it proved a valuable spearhead to get this type of conference moving in Turkey. While the event does not seem to be significant for venture capital or entrepreneurs seeking investment, it is good to see Turkey's prominent PE executives getting together to hash this one out. The agenda looks interesting, especially the panels that will discuss the great potential that the emerging market of Turkey will have for LPs and GPs. In addition take a look at this list of conference speakers:

Sarah Alexander, President, EMPEA
Achmed Al-Shahrabani, Senior Vice President, Abraaj Capital
Uğur Bayar, Managing Director & CEO, Credit Suisse Turkey
Mete Çakmakcı, TTGV
Murat Çavuşoğlu, Managing Partner, Actera Group
Can Deldag, Managing Director, The Carlyle Group
Serkan Elden, Managing Director, AIG Capital Partners
Saki Georgiadis, Investment Director, Gartmore Private Equity
Tolga Işmen, Lawyer, Ismen
Salim Kadıbeşegil, Chief Executive Officer, ORSA Strategic Communications Consultancy
David Nieuwendijk, Senior Investment Officer Private Equity, FMO
Murat Özgen, Chief Executive Officer, İş Private Equity
Carlos Perry, Chief Operating Officer, EMPEA
Jose Romano, Head of Turkey & Istabul Venture Capital Initiative, European Investment Fund
Nikos Stathopoulos, Managing Partner, BC Partners
Seymur Tari, Managing Director, Turkven
Selcuk Yorgancioglu, Executive Director & Turkey Country Head, Abraaj Capital
Birol Yücel, Managing Director, Turkven

For most of you who have followed Grandstanding Traction over the last few years, I think you can see the significance right away about what this conference means for Turkey and the growth of private equity. What I wouldn't give to be a potential GP with a private placement memo ready to go for this event. So for all those interested in putting together a fund, dust off your elevator pitch. Registration for the PEI Turkey Forum will cost you a pretty penny.

The question will remain, "Will those types of high net-worth individuals from Turkey come out for this event?" I encourage all who are interested in making investments in Turkey to attend this event. Private equity is cyclical, and Turkey has some thriving industries yearning for investment since the recent downturn. The website specifically states that all types of institutional investors will be given complementary tickets, so we can already see the potential waiting for GPs at this event. All the relavant players will be there - so should you.

Turkey wants to export the idea of investing in firms and running them?

2009-06-15T01:24:00.005+03:00

Can anyone tell me what the OYAK chief is talking about? Most likely another lousy report translated in English by our fine Hurriyet expose-journalists.

Export concepts, says OYAK chief

MARDIN - OYAK, Turkey’s leading pension fund which is active in automotive, steel, cement and energy, may ’export’the formula that made it a success over the past nine years, according to Chairman Coşkun Ulusoy. ’Imagine the name of any major private equity fund or pension fund worldwide, and I can guarantee you we are talking to them,’Ulusoy says.

At a time of plummeting exports amid global recession, the chairman of Turkey’s leading pension fund suggested a novel means to economic revival over the weekend: "export of concepts."

Selling a Turkish business model abroad might sound a bit far-fetched. But Coşkun Ulusoy, head of the military pension fund OYAK made it clear at his annual press briefing that this was the next project up his sleeve.

"Imagine the name of any major private equity fund or pension fund worldwide, and I can guarantee you we are talking to them," Coşkun told a gathering of business reporters and editors assembled at an OYAK’s Mardin Çimento cement factory in this historic city. "We can export concepts."

At the moment, OYAK’s exports are limited to cement, steel and cars and light trucks from its Renault-Mais division. Its 50-odd companies dominant in basic industries turned a profit of $2 billion last year and despite the harsh economic environment Ulusoy predicts the group will again be profitable this year.

But, he explained, the fund’s longer-term success may well come by selling the formula that made its remarkable success over the past nine years possible. That success, he argued, is in the fund’s unique daring to eschew the passive investment strategies of comparable pension funds in favor of a strategy of taking majority interest in firms, joining the management and actually running them.

"This is a unique model of success and its also uniquely Turkish," Ulusoy told an informal three-hour gathering. "If Turkey is going to export something, let’s export this model."

(I believe this is called private equity!?!)

In this crisis, what should central banks be thinking about hedge funds and LBOs?

2009-04-22T01:49:00.007+03:00

Hello World! Sorry about the long hiatus once again, but I've been busy. It appears though that the recent downturn has not left me much to talk about really other than a few conferences here and there as well as people inquiring about work. So to go in another direction, I thought I would post something I just wrote up regarding hedge funds and LBOs and how it may concern central banks. Please note, I've posted my linkedin profile badge on the right if you feel like you would like to make contact. Cheers!

Hedge Funds May Be Usurping Central Banks Authority

Generally, Leverage Buy-Outs occur when the LBO or private equity firm borrows “or leverages” funds in order to take a controlling stake in another firm. Usually the target firm has hard physical assets and somewhat steady cash flows, or management of the target firm has orchestrated the takeover. The assets of the targeted firm are used as collateral to secure the debt taken on by the LBO firm. In some cases, firms that are bought out are private corporations, but in other cases, public firms are leveraged, bought out and taken private.

When a leverage buy-out occurs, certain issues may arise depending on the two firms’ situations. Managers orchestrating an LBO, according to Ross, Westerfield, Jaffe and Jordon, will tend to work harder since they now own a substantial portion of the business, thus reducing the agency cost of equity (2009). We already know that LBOs will customarily buyout shareholders at a price above market value, but this still leaves the area of manager’s insider information up for speculation and future research. Indeed, the fact that managers chose to buyout equity using leverage suggests prior knowledge to the fair value of the firm and begs the question whether the price paid to shareholders was at a premium or still undervalued. This also is the classical dilemma of shareholder asymmetric information when shareholders choose to sell their shares.

Historically, private equity firms have existed because limited partner investors have trusted them with their funds to make wise investments buying out firms and making a return on this investment. The objective of the PE firm and its investors is generally very clear. Now, enter the hedge fund. Hedge funds, equally, have investors that seek returns on their investments. However, hedge funds survive on making a wide variety of investments in commodities, stocks, debt and so forth, depending on the strategy of the firm. Here lies an area of ambiguity for investors and on regulation of hedge funds. Portfolios of hedge funds and strategies may change very quickly depending on market conditions, and investors need to be aware of this. Furthermore, hedge funds have been in the limelight as of late in their recent appetite for leveraged takeovers. To give an example, here is an excerpt from Reuters in 2007:

Just two years ago [2005], Henry Kravis, co-founder of buyout firm Kohlberg Kravis Roberts & Co. (KKR), speaking at a conference in Frankfurt, said hedge funds were good stock pickers but should be kept out of investing. "Hedge funds are not set up to build value in companies over the long term," he told an audience of private equity firms and their investors. Fast forward to last January, when KKR was involved in the buyout of for-profit education company Laureate Education Inc. Joining KKR in the investor group was S.A.C. Capital, among the largest hedge funds in the world. (Flaherty)

According to AIMA’s Roadmap to Hedge Funds, the hedge fund industry may have managed $2.5 trillion dollars at its peak in the summer of 2008 (Ineichen). As you can see, hedge funds comprise one of the largest asset classes under management. Interestingly enough this is about the size of the damage in the current US recession, but this is beside the point. Thus, it may appear obvious that central banks of various countries and government regulators are a little concerned when it appears that hedge funds may be stepping outside of their mandate stipulated by their limited partners’ PPMs.

Research has shown that hedge funds are taking on an active role in investing in firms with potential for LBOs (Huang, 2008). Based on a hedge funds initial investment, an LBO offer is more likely to occur than with any other investment institution and also shows signs of a significant increase in premium paid for the firm when a hedge fund is present. Having said this though, when there is an LBO boom, hedge funds that do partake in LBOs experience abnormal returns.

As Farrell and Lund (2007) so eloquently put it, "The rush of cash emanating from these players could be fueling asset-price bubbles. Private equity and hedge funds could create new sources of financial-market instability, including higher credit risk and a greater change of "systemic risk" in which one or more large hedge fund failures start a dangerous ripple effect across global capital markets—as occurred in 1998 with the near collapse of Long-Term Capital Management. Because all these players are lightly regulated, they can move huge amounts of money beyond the scrutiny of financial-market authorities."

For a hedge fund to use its funds to lend on a LBO, in a sense, the hedge fund is extending credit much like a bank would. This is cause for concern, since in some cases, a hedge fund’s investors may have been banks themselves who are regulated under a countries central bank. This also means that the cost of debt must either be evenly and competitively matched with other lending institutions or it might be simply more expensive. Thus, here lies another crux of the issue. Banks’ interest on lending is stipulated by central banks of the particular country. In contrast, hedge funds can stipulate their own lending terms simply depending on their desired return, thus taking the central bank out of the equation. So, we have an institution that is lending massive amounts of currency like a bank, but is not regulated like a bank. In addition, hedge fund investors are taking on added risk of paying for above market value stock for companies and entrusting third-party LBO firms to manage their exits. Finally, the public markets exist to allow firms to raise funds by selling portions of equity. By taking more firms private through debt acquisition, the “ethos” of companies’ capital structure- debt vs. equity, not to mention the public market’s existence, is circumvented. When more and more companies are supported by money that was created outside of the central banks control, this affects the central bank’s ability to control monetary supply.

Notwithstanding the recent credit debacle and the “fall” of the hedge fund industry, it is no wonder that regulators were starting to question the methods of hedge fund techniques and beginning to legislate more surveillance. Throw the recent crisis into the mix, and you have plenty of reason for more legislative rigour.

References: Farrell, Diana and Lund, Susan. “Power Brokers” Newsweek International, October 20th, 2007. McKinsey Global Institute.
http://www.mckinsey.com/mgi/mginews/powerbrokers.asp

Flaherty, Michael. “Hedge fund-LBO alliances deepen” Reuters.com. April 9th, 2007. http://www.reuters.com/article/GlobalHedgeFundandPrivateEquity07/idUSN0245257020070409?pageNumber=2

Huang, Jiekun, “Hedge Fund Activism in Leveraged Buyouts” (December 15, 2008). Available at SSRN: http://ssrn.com/abstract=1086687

Ineichen, Alexander and Silberstein, Kurt. “AIMA’s Roadmap to Hedge Funds”. November 2008 The Alternative Investment Management Association. http://www.aima.org/download.cfm/docid/6133E854-63FF-46FC-95347B445AE4ECFC

Ross, Westerfield, Jaffe, Jordan. Corporate Finance: Core Principles and Applications. 2nd Edition. McGraw Hill International 2009. P. 472.

Turkven Makes Investment in Mavi Jeans - October 2008

2008-11-25T16:22:00.007+02:00

NOTE: To all my readers, I'm sorry for the recent hiatus in updates, but during the course of a full time job and starting a masters program, I've had little time for anything else. Needless to say, we are amidst an economic conundrum of sorts, but that doesnt mean that things have come to a standstill. When times look most bleak, we must all remember the cyclical nature of things.

Also, I would like to point out that my blog as well as the millions of other Blogger blogs were blocked by a court ruling inside of Turkey during a weekend in October. Apparently, the local satelite provider needed to block a blog that was posting videos of football matches, and we all got thrown in the same basket. In addition, it appears that Dogan Media has decided to envelop all of the Turkish Daily News and will no longer be running their website. Unfortunately, a lot of my previous posts have links to the TDN and will no longer work - for that I'm sorry, but it is out of my control. Life is like this sometimes.

So, in doing some housecleaning, I would like to publish the press release in its entirety from Turkven that came out in October 2008. What can we take away from this venture? Was it a last ditch effort for TVPE II to get deals done before the sh*t hit the fan? Equally, on both sides of the boardroom table, this very well could have been of critical importance for Mavi to find liquidity. Do you consider a jeans maker a conservative or risky investment at this stage? Albeit a very competitive market, perhaps the terms of the deal were too good to pass up.

TURKVEN INVESTS IN MAVI
October 2008

Turkven has acquired a stake in Mavi, the leading Turkish apparel brand.

Founded in 1991 by the Akarlilar family, Mavi has operations in 27 countries through a retail network of 190 stores generating over US$150 million of sales in 2007.

Ersin Akarlilar, Executive Board Member of Mavi said: "Mavi’s ambition is to become a US$1 billion company with a global brand and retail operations. We have partnered up with Turkven to leverage their network and operational expertise to achieve our goals."

Turkven Managing Director Seymur Tari said: "Mavi will build on its strong denim heritage to grow into a global lifestyle brand. Mavi is a pioneer, and it serves as a role model for Turkish companies with its brand, design capability and global ambitions."

Turkven Principal Kerem Onursal added: "We are an industry leader with a track record of investing in industry leaders. Our experience allows us to look beyond the short term volatility to identify sustainable businesses with a potential to create substantial shareholder value."

Turkey's Privatization Program: Scheduled Privatizations as of 2008

2008-09-29T12:16:00.007+03:00

Courtesy of Guner Law Office and Mondaq, this publication (membership required) provides the latest updates on Turkish Law and the current economics environment, most notably, a scheduled list of potential privatizations slated for 2008 and 2009.

More information can be found at Turkey's Privatization Administration (OIB)

Ughh! Turkish Investment Copes With The Global Crisis

2008-09-19T13:38:00.011+03:00

With nothing good to talk about these days on the global front, the question needs to be asked, "Who are going to be the last ones standing?" Lehman bankrupt, Merrill Lynch helped out by Bank of America, Morgan Stanley and WAMU looking for buyers, the US bailouts of Freddie Mac, Fannie Mae and now AIG - these past weeks have left everyone in awe of the historical proportions. Historic in the sense that the government is stepping in and stewarding companies - historic in the sense that the government has put a hold on all short selling - historic in the sense that people are drawing comparisons and even mentioning the Great Depression! You have to ask yourself, when was the last time any of this happened before? Next we need to ask, "Who is to blame?" Is it the simple prudent investor who couldn't pay his morgage? Is it the lender who kept adding the tightly-wound-up deals to the portfolio? Is it the leveraging of that risk to others that maintained the confidence? Somewhere the fundamentals told us to take an extra step and put an extra risk-free card on this house of cards.

So I figured I would revert this post to somewhat of a newsletter format to let the reader browse and drill down through the applicable and relevant news regarding Turkey. News is provided courtesy of the Turkish Daily News. Here goes:

Turkish economic growth slumps to slowest in six years

Turkey's economy grew at the slowest pace since the country emerged from a recession six years ago as higher interest rates and the threat of political instability hurt consumer spending. Gross domestic product growth slowed to 1.9 percent from a revised 6.7 percent in the previous quarter, the state statistics office in Ankara said yesterday. The pace of growth in the European Union membership candidate slowed as the global credit squeeze damped demand in export markets and the Central Bank added to the cost of borrowing.

Corio cancels $1 billion-worth of investment in Turkey

Corio NV, the largest Dutch developer, will drop plans to develop $1 billion-worth of shopping malls in central and eastern Turkey, and focus instead on the country's biggest cities.

R&D spending puts Turkey on the map

Turkey ranks 25th out of the world's 41 highest-spending countries on research and development, a recent report revealed.

Urla to have its Silicon Valley

İzmir's Urla district is about to become a leading spot for Turkey's technological developments, as a French firm, CICOM, which supports technology zones in different countries, signs a contract with the Institute of High Technology to make 4 billion worth investment.

Tekfen sells 50 percent share to Palmali-Socar

The partnership between the Azerbaijani Palmali Company and Azerbaijan's State Oil Company, or Socar, has bought 50 percent of the construction arm of Tekfen Holding A.Ş., a Turkish builder and power generator, for $520 million.

Turkish businesses on alert over global crisis

The United States credit crisis, which is having an increasing impact upon the global financial community with each day, has recently become a top priority on the Turkish business world's agenda. As the U.S.-born crisis spreads through Europe, officials are also keeping a close eye on the Istanbul Stock Exchange, which has lost approximately 15 percent of its value in the last five days.

Abraaj Capital Acquires Luxury Yacht Maker - Numarine; Summary of Gulf Nations Investment in Turkey

2008-09-04T09:41:00.011+03:00

Istanbul, August 27 2008: Dubai-based private equity firm Abraaj Capital has acquired a 50 per cent stake in Turkish luxury-yacht manufacturer Numarine, as global demand grows in the US$ 25 billion market for recreational boats.

Abraaj, the largest private equity firm in the Middle East and North Africa, will partner Numarine Chief Executive Officer Omer Malaz, who founded the company in 2002.

The investment is Abraaj’s second in Turkey and third in the marine business. Last year, it bought part of Acibadem, the only healthcare provider listed on the Istanbul exchange. Abraaj also owns stakes in Dubai-based luxury-yacht distributor ART Marine, and Gulf Marine Maintenance & Offshore Company.

"We are delighted to partner with Omer and Numarine, and believe that the company is extremely well positioned to benefit from growing demand for high quality, excellent value motor yachts," said Abraaj Managing Director Mustafa Abdel-Wadood.

Global demand for recreational boats, which grew 11.4 per cent per year between 2000 and 2006, is expected to rise further, with Turkey’s market share expanding as it matches or exceeds comparable international makers in technology and style at more competitive prices.

Demand for yachts in the Middle East, for instance, has soared in the last few years, with the region now accounting for 8 per cent of global owners, compared with almost zero a decade ago, according to the Global Order Book 2008 survey.

Numarine targets an income more than 30 million Euros by the end of 2008 and more than 40 million Euros in 2009.

Numarine will use the capital injection to expand its production facilities, as well as boost research and development, and product design.
To read more, visit Numarine's press release.

=======================================================================
In other news the TDN posted a rather summarized update (Turkey the winner in Gulf's investment hunt) of the latest acquisitions in Turkey from the Gulf region, as Gulf-based capital investment volume has reached $30 billion. I should warn you that some of these deals go as far back as 2006, but I felt it was interesting so I am posting the highlights as well as added links for you to drill down :

National Bank of Kuwait expands in Turkey with the Conclusion of a 40% Acquisition of Turkish Bank
Kuwait Investment Authority has acquired Cevahir Business Center.
Emaar Properties, owned by the Sheikh of Dubai El Maktoum, is planning a $5 billion-worth investment in Turkey by 2010, focusing on healthcare, shopping malls, hotel and real estate areas.
Abraaj Capital, an investment firm specializing in private equity investments in the Middle East, North Africa and South Asia, partnered with the Acıbadem Hospital (press release - pdf) and then the Numarine yacht company.
Dubai Islamic Bank opened a representative office in Turkey.
The International Investor, a Kuwaiti investment group, acquired 75 percent of the share of Docar, a Turkish car rental company, for $24 million. The company is planning to found a consumer financing company as well as looking into second-hand vehicle sales, financing and participant banking.
The Arab Banking Corporation opened a representative office in Turkey. The firm may yet acquire a Turkish Bank.
Oger Telecom acquired Türk Telekom for $6.5 billion.
Kuwaiti Alshaya Group, which brought prominent global brands such as Starbucks Coffee, The Body Shop, Topman and Topshop, is planning a $100 million-worth investment in Turkey in three years.
Kuwaiti International Leasing Investment founded Haliç Leasing with $5 million capital. The group is looking to operate as an investment bank in Turkey.
Dubai Islamic Bank acquired MNG Bank.
Dubai Multi Commodities Center, or DMCC, plans to enter Turkey's gold and tea markets.
The National Commercial Bank, or NCB, the biggest bank of Saudi Arabia, acquired Türkiye Finans.
Kuwaiti investment group The International Investor acquired Adabank.

Endeavor Turkey's 2008 Entrepreneurs

2008-08-26T15:03:00.005+03:00

At the beginning of the summer, Endeavor Turkey announced its 2008 Endeavor Entrepreneurs. I felt that covering this story not only reflects the tenacity and success of Turkish entrepreneurship, but also proves the existance of hot deals for venture capital and potential acquisition. Indeed, it is no mystery that some of Endeavor's 2007 winners, which I wrote about, had no problems with securing continued funding, were acquired, or had sufficient growth in the year that followed the award. In another example, AirTies, one of Endeavor's 2006 winners, after the award, secured $3.1 million from four angel investors. Endeavor provides selected entrepreneurs with customized services from highlevel business mentors, Fortune 500 consulting firms and top U.S. business schools. The goal is to help these entrepreneurs scale their businesses and reach their highimpact potential.

The 2008 Endeavor Turkey's Entrepreneurs are:

Artesis – Ahmet Duyar:

It's product, the MCM (Motor Condition Monitor), "provides early warning of progressively deteriorating machine and process conditions, thereby maximizing a plant’s available assets through reducing unplanned downtime, and improving revenue and savings," said Ahmet Duyar, CEO of Artesis. "In addition, MCM provides information about the quality of the incoming power, energy consumption as well as the abnormalities in the plant."

MCM is a unique solution that safeguards rotating machinery from common faults, both electrical and mechanical, such as misalignment, imbalance, bearing faults, short-circuits, etc. by measuring only voltages and currents. Applications include sectors of iron and steel works, glass plants, power generation plants, water departments of municipalities, cement plants etc.

A subsidiary of Arcelik A.S., the company is dedicated to the research and development of state-of-the-art systems for quality assurance and condition monitoring.

It received the "Editor's Choice Award" by the Control Engineering Magazine published in the USA stating that it was amongst the 40 best products in 2000.

This patented core technology, a result of a 25 year-long research effort, has previously been applied in the US at NASA.

Bizitek – Murat Şahinoğlu & Kerem Erdem:

Bizitek was founded in 2000 as a subsidiary of Probil to provide companies with e-business end-to-end customer and solution oriented software, consulting services to achieve maximum efficiency, and turn changes in technology to a competitive advantage. Since 2004 Bizitek has grown by providing quality business solutions to Companies in Turkey and around the world.

Monopoli Sigorta – Erol Esentürk & İzzet Bonofiyel:

A new kind of insurance agency, buying and reselling insurance - one insurance policy for multiple needs online.

Speedcity – Ahmet & Ali & Canan Özgün:

This is a motorsports enthusiast's entertainment destination, hosting all motor racing products, clothing and accessories, simulation games, as well as a cafe.

Türkmix – Aydın Şeker & Damla Gönül & Elda Maraşlı:

By the looks of its website, Türkmix strives to be a high quality fast-food restaurant chain. With simple menu options, this could be the "McDonaldization" of Turkish food.

The finalists were chosen by the following Endeavor panelists:
Mehmet Ali Babaoğlu (Türkiye, Füsun Tasarım),
Ali Koç (Türkiye, Koç Holding),
Cansen Başaran-Symes (Türkiye, PwC),
Alvi Mazon (Türkiye, Arena Bilgisayar),
Khaled Bichara (Egypt/Italy, Wind Telekom),
Edward Mishrahi (England, Eton Park Capital),
Nick Beim (USA, Matrix Partners),
Dan Och (USA/Och-Ziff Capital),
Murat Özyeğin (Türkiye, Fiba Holding),
Fadi Ghandour (Jordan, Aramex),
Naguib Sawiris (Egypt, Orescom),
Aly Jeddy (USA, McKinsey),
Brian Swette (USA, Burger King),
Paul Harris (South Africa, FirstRand),
Shwan Taha (Türkiye, Melak Danışmanlık),
Işık Keçeci Aşur (Türkiye, Aragon Capital),
Mahmut Ünlü (Türkiye, Standart Ünlü),
Fadi Nahas (Türkiye, Everfresh)

About Endeavor
Endeavor breaks down barriers that prevent emergingmarket entrepreneurs from reaching their highimpact potential. Hailed by NYT columnist Thomas Friedman as the "mentor capitalist" model, Endeavor identifies entrepreneurs leading highgrowth, innovative companies in emerging markets. These entrepreneurs are given worldclass strategic advice, access to key networks and other tools that will catapult them to success. With Endeavor's guidance, they become “highimpact” – creating jobs, generating wealth and inspiring others to innovate. Often overlooked, these local entrepreneurs are jumpstarting private sector development in their countries.
Endeavor June 9th, 2008 Press Release (PDF)

Conflicting Reports on Turkey's Economic Slowdown in 2008: Ernst & Young, Iş Private Equity, Deloitte Touche Turkey

2008-07-28T10:32:00.015+03:00

Ernst & Young Says Shopping Center Boom is Over!

This last May, Ernst&Young Turkey's managing director Osman Dinçbaş came out and said that Istanbul had reached the famous number of 100 shopping centers: a number that was predicted to meet Istanbul's demand. He even went on the say, "Taking those under construction into account, the number of malls will rise above 100. Can the city handle such a number? I believe a crisis in our country will stem from this."

Interesting perspective in this article, but having lived in this city, I'm sorry, but I kind of have to disagree. Very cautious. While there still might occur a crisis in Turkey, this will be a result of other issues. Decline of retail receipts will only occur after the fact. Maybe he should visit Carrefour on a Saturday afternoon? Compared to Europe, Turkey is still well below the number of square meters/population. I wrote about some of this last year: The Shopping Center Boom in Turkey

Iş Private Equity Sees Continued Inflow and Strong Growth

Also printed in May of this year in the TDN: İş Private Equity forecasts growth

Private equity funds investing in Turkish firms will continue to grow and yield strong returns in 2008, Murat Özgen, chief executive officer of İş Private Equity "The current year will be another bullish year for private equity in Turkey and will follow the footsteps of 2006 and 2007," Özgen said. "We will see couple of mega funds entering the market and doing buy-outs.

Although he is somewhat bullish about the year, he still admits that granting bank loans and finding leverage might be difficult. I guess the question remains that eventhough private equity is cyclical and may have problems in the short-run, if there is a crisis on the horizon from global causes, how short will it be and when will it come? Can Turkey weather the storm?

Deloitte Touche Turkey Releases Private Equity Confidence Survey for 1st Half 2008

This just out in the TDN: Investor confidence declines, says Deloitte

According to the survey, "Some 75 percent of investors who participated in the survey expect the overall economic climate to continue its decline, and none foresee an improvement. Only 25 percent of private equity investors that participated in the survey believe the overall climate will remain unchanged, the report showed. That figure stood at 55 percent in Deloitte Turkey's previous survey six months ago."

Interestingly enough, according to the report, the overall view is that deal volumes will remain about the same, but that transaction multiples will be lower.

For a full read on this free report, visit:
Deloitte Turkey Report page, or
Download it here: (PDF)
Private Equity Confidence Survey (PECS): Survey for the 1st half of 2008

Deloitte puts out some pretty amazing reads, and this is no different. So, coupled with Turkey's political turmoils, and the global slowdown, Turkey will be hard pressed to get ahead this year.

Carlyle Group Gets Its Feet Wet In Turkey: Aquires 50% of TVK Shipyard

2008-07-28T10:05:00.008+03:00

Yes, I know it has been awhile, and I'm sorry for that. I'll try to feed the most recent stories that have occured this summer.

It seems Can Deldag of Carlyle Group in Turkey has come through with his words last spring. We knew that Carlyle had something in the works that would bear fruit this summer.

At right, you can see (L-R) Walid Musallam, head of Carlyle Middle East and North Africa, Can Deldag, director of Carlyle Turkey and Can Topsakal, TVK board member.

The most relevant stories are from suprisingly the Hurriyet's English division:
Carlyle group acquieres 50 pct of Turkey's TVK
and a somewhat comical TDN report:
Carlyle Group partners with TVK

When interviewed by Reuters, Can Deldag had this to say.

"We can easily complete 2-3 investment projects in the next 18 months. These could be companies operating in health, logistics, transport and non-food retail sectors," Deldag said.

"If we have the opportunity we could invest in other companies, including non-bank financial firms too," he said.

Carlyle, which has assets worth $82.7 billion globally, did not set up a separate fund for its investment in Turkey but has a global fund worth $35 billion to finance such investments.

"We do not plan to get out of our investments in Turkey in 1-2 years. We're looking at it with a longer perspective," Deldag said.

The company planned to prepare TVK for an initial public offering (IPO) by 2010, after capital injection and corporate governance have been put in place, he said, adding that it might invest in other ship building companies.

Deldag saw private equity investments in Turkey rising in the coming years. "Under the current circumstances, there's no reason why Turkey should not attract $3-5 billion private equity investments from 2009 annually," he said.

I know some of you had asked for any pertinant information on Carlyle and their activities in Turkey, but this is the best that can be put together at the moment.

Teknoloji Yatirim A.S. Launches New Website

2008-06-16T11:12:00.008+03:00

From what I understand, TTGV, the Turkish Technology Entrepreneur Fund has spun out Teknoloji Yatirim A.S. and has been operating for some time now, although TTGV still exists.

With that Teknoloji Yatirim A.S. (www.teknolojiyatirim.com.tr) has launced it new website. Teknoloji Yatirim A.S. has a fund size of $5 million, and so far, three companies in its portfolio. The fund is investing in startup\entrepreneurs in the Technology and Biotech arenas. Interestingly enough, it makes sense that Dr. A. Mete ÇAKMAKCI is the wise chairman at the helm, descending from TTGV, and Haluk ZONTUL is CEO. In addtion, it seems Evren UNVER, co-founder of Turkven, is also a board member.

I would like to thank by readers and friends at Teknoloji Yatirim A.S. for submitting this. The private equity/VC Index on the left sidebar has been updated.

And with that, the VC pool in Turkey just got a little bit bigger.

PDF Kurumsal Acquired by Taib Bank BSC

2008-06-16T10:46:00.006+03:00

Earlier this month, according to Bloomberg, Taib Bank BSC, the Bahrain-based investment bank controlled by Dubai's ruling sheikh, said its Turkish unit bought Istanbul-based corporate finance advisors PDF Kurumsal Finansman Danismanlik Hizmetleri AS.

Taib Yatirim AS, the brokerage unit of Taib YatirimBank, bought PDF in cash and shares to expand its investment banking services in Turkey, Taib said in an e-mailed statement, without disclosing the price.

Taib's Turkish broking unit will be renamed Taib-PDF Menkul Degerler AS, the statement said.

"We are proud to have the PDF team join us to create the strongest corporate finance offering in Turkey," said TAIB Bank chief executive officer Iqbal G Mamdani.

Taib Bank is a unit of Dubai Financial Group, which is part of Sheikh Mohammed bin Rashid al-Maktoum's Dubai Holding LLC.

PDF is an Istanbul-based corporate finance advisory firm renowned for its Turkish market leadership in merger and acquisition activity, advisory services, tender offers, distressed debt management, privatisations and project financing.

To conclude with some last remarks, this looks like another foreign broker looking for playing time in the Turkish market, and with the experience of PDF, TAIF looks poised to get a piece of the M&A activity as Turkey blossoms.