A Turkish Private Equity Web Log

In an effort to cover the Turkish Private Equity Industry - for the promotion of Entrepreneurship, the private equity asset-investment model, and the communication thereof.

AlarmClock:Euro adds to Grandstanding's Traction
As a blogger, I'm very humbled by TheAlarmClock:Euro's mention of Grandstanding Traction. {Turkey's Venture Market Has A Blog}. However, as a PE/VC Enthusiast who truly believes in the potential boomtown proportions of the Turkish market, I never doubted that it would happen. Also mentioned, were Cem Sertoglu's Sortipreneur and Baris Karadogan's From Istanbul to Sand Hill Road.

For those of you who are new to Grandstanding Traction - Welcome! For a review of our objectives, go to our first two posts:
Introduction: Grandstanding Traction Objectives

The Existence of Grandstanding in Turkey?

Rightly so, I received a sizable jump in visitors as the post was released last Friday. Here is the token statistic spike image:

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Posted @ 22:37   0 Comments
Google's new Gapminder and Turkey's working women
Per Paul Kedrosky's Infectious Greed Gapminder post regarding Google's acquistion of Gapminder, I'm sure many can make their assumptions behind Google's strategy at picking up this interesting tool. You can also check out Alarm:Clock Euro's account of the Gapminder acquisition. As a geek when it comes to data imaging models, the "coolness" factor here is pretty "juicy". I can only imagine the multitude of datasets that could be nicely plugged into this little toy. As mentioned on the sourced posts, "too bad you can't enter your own data yet." The "play" and "trail" function are really nice. Nicely done. It will be interesting to see what Google's intentions are. Yes, we can all talk about the distribution of funds, moving money around, keeping stock prices afloat, acquisition of human resources, or making it look like "we are doing something", etc. I mean, come on, if you have a lot of cash, like Google does, you have to put those assets to work. Nonetheless, Google has picked up another good application. Check out Gapminder.org or try the Gapminder Beta and see what you can do.

Playing around with it, though, I thought it interesting to see the direction that Turkey's Women have gone. On this data set starting from 1980, I indicated Greece and Italy as European Union countries, and then threw Bulgaria in as an EU canditate at the time, and compared it with Turkey, itself an EU candidate and emerging market.

Looks disappointing, right? Well, population has something to do with it, but all things being equal, this should have been better. From 1980 to present, the percentage of women in the workforce went from 35% to just over 25%. Is this culture? Is it the (easy) cost of living? Is it the hidden economy? Why is it that more women are not working? The government, NGO's and banks have established promotion programs and funding incentives, but in a time when we should be monitoring innovation and pushing entrepreneurship, we find ourselves still concerned about general education and finding work. Perhaps we are just not there yet. Your thoughts?

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Posted @ 10:51   0 Comments
Investment Banks clamor toward Turkey; Scoop up Brokerages and Licenses
Turkey – the emerging market. Could it be that the political and fiscal doldrums of Turkey are in its past? Well, the statistics of Turkey’s evolution and its developing status tell an amazing story. Able to withstand the hiccup of the global markets and hot-money pull-out of last year, the Turkish market has been outperforming almost all of the world’s markets (at least up until the end of February). Faced with this “sense of stability”, major brokerage and investment houses have decided to set up shop in Turkey in attempts to reap the remaining benefits of this growing market. With a new deal being announced literally every month for the last six, could we actually call it a boom? Nevertheless, will the ghosts of Turkey’s past come back to haunt (hence, the implications of the most recent global downturn), or have these banks and investors really taken a leap of faith toward a hopeful and developed nation?

A list of entries and office openings (though not complete) is as follows:

July 10, 2006
  • French-British investment bank Rothschild said it will open a bureau in Turkey to take advantage of the fast-growing Turkish economy.

August 22, 2006
  • Barclays Capital has become the latest investment bank to appoint a dedicated head for its Turkish business as investment banks crowd into one of the world's fastest-growing markets.

    The UK investment bank, which has been recruiting aggressively under chief executive Bob Diamond, has hired Murat Talayhan from Standard Bank to a new role as head of investment banking in Turkey.

November 07, 2006
  • Morgan Stanley announced its intention to open an office in Istanbul, Turkey. The Firm has received the appropriate approvals from the Capital Markets Board (CMB) of Turkey and plans to open an office in early 2007. Morgan Stanley has been active with clients in Turkey since 1990 and intends to offer a comprehensive range of business lines through its newly established presence, including investment banking, capital markets, sales and trading, real estate and commodities. In order to facilitate the establishment of an office, Morgan Stanley has acquired Arigil Menkul Degerler, a Turkish brokerage company, including its regulatory licences.

    "As clients in Turkey demand sophisticated investment solutions across the range of asset classes, having local expertise and resources will be of significant benefit", said Gulnaz Aricanli, Head of Morgan Stanley in Turkey. "Turkey is a rapidly growing and strategically important market for the Firm and so to be involved in building and leading Morgan Stanley's business in Turkey is a great opportunity, and one with which I am excited to be associated."

December 27, 2006
  • Credit Suisse could be the sixth international banking group to head for Turkey this year, after targeting a domestic broker that will give it access to the lucrative emerging market.

    The Swiss-based banking group has been linked with Turkish brokerage Baran Securities, although it is understood that reports in the local press claiming the deal has already been signed is "jumping the gun". (Sourced: Aksam Gazetesi)

January 09, 2007
  • Citigroup is to obtain a Turkish broking licence by acquiring a stockbroker in the country and hiring 12 staff for its Istanbul-based research and equities team. It is the latest expansion in Turkey by a foreign bank.

    The move comes less than five months after Citigroup bought a 20% stake in Akbank, Turkey’s third largest bank, for $3.1bn (€2.5bn).

February 8, 2007
  • Merrill Lynch said that it had opened an office in Istanbul and that it had expanded its investment banking team focused on the country. The bank will provide investment banking, corporate finance, risk management, advisory, research, securities origination, brokerage, dealer and related services in Turkey. Merrill Lynch announced three new Istanbul-based hires reporting to Kubilay Cinemre, head of global markets and investment banking at Merrill Lynch.

    In December 2006, Merrill Lynch acquired a small private lender in Turkey, Tat Yatirim Bankasi, and its brokerage unit Tat Menkul Kiymetler AS. Tat Bank will take the brand name of Merrill Lynch in Turkey; and Tat Securities will become Merrill Lynch Menkul Degerler or Merrill Lynch Securities, it said at the time.

March 1, 2007
March 1, 2007

As always, I welcome any comments or additions to this list. It will be interesting to see who will be next. Any rumours availible can be discussed here. It definitely is not a bad time to have a licensed boutique investment house in Turkey. Now might not be a bad time to add those little atmospheric touches to the office to raise the value of the firm.

UPDATE: May 10th, 2007
  • Credit Suisse finally made a play for Turkish brokerage house Baran Securities (Baran Menkul). According to Reuters, "Credit Suisse, which already had an office in Istanbul, said it now held a broker-dealer licence on the Istanbul Stock Exchange (IMKB) and would offer expanded equity sales, trading and research in Turkey." On May 5, Credit Suisse began trading under the name of Credit Suisse Istanbul Menkul Değerler A.S. Exact numbers were not disclosed.

    Source: Credit Suisse Press Release - May 10th, 2007
    Alternate Source: IMKB Listings of Members - Brokerage Houses

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Posted @ 22:13   0 Comments
Standard Bank partners with Dundas Unlu; forms Standard Unlu
South Africa’s Standard Bank has acquired 67% of boutique brokerage house Dundas Unlu for an undisclosed sum pending Turkish and South African regulatory approval. The acquisition will be achieved by selling the entire shareholding of Alasdair Dundas, Tahincioğlu Holding A.Ş. and Özcan Tahincioğlu. Mahmut Ünlü, one of the founding partners of Dundas Ünlü, will continue in his role as CEO and the new partnership will be called Standard Ünlü.

{Standard Bank Press Release – Standard Bank and Dundas Unlu join forces in Turkey}

Standard Bank said in its statement, "This transaction is clear evidence of Standard Bank’s commitment to Turkey and is consistent with the continued development of its emerging markets franchise."

{Graph courtesy of Dundas Unlu}

Conjecture is still open for discussion and development on the reasons for this deal. Nonetheless, the current partners of one of Turkey’s leading M&A advisors have exited for ventures elsewhere. Time will tell where they end up. Clearly the grandstanding being done in a presentation/report by Dundas dated January 2007(pdf) and on the ground after the recent TAV deals and IPO has been rewarded. The report is very detailed and lists every boilerplate and deal since 1999.

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Posted @ 16:24   0 Comments
UPDATE: TAV IPO nets Goldman over $50 million in 2 months
You may have watched last week’s IPO of TAV with baited breath, but was there really any need for concern. TAV was able to raise $320 million. Early predictions slated Goldman Sachs would walk away with over $30 million in gains. These estimates were shattered as the stock price reached a peak of 11 YTL on the day of offering. Upon exit, Goldman proceeds could turn out to be in excess of $50 million - a nice 60 days work, if you can get it.

My kudos go out to those men and women on the ground that pushed the interest through with this IPO. Here’s how the IPO fell out:
  • London: International institutional investors bought up just under 70% of the shares
    Demand for allotment was oversubscribed 18x.
  • Istanbul: Domestic investors bought the remaining 30% of shares
    Demand for allotment was oversubscribed 10x.
  • Total demand for shares: $5 billion based on oversubscription.

As seen in the graphic on the right, TAV has since taken a fall with the recent volatility at the Istanbul Stock Exchange. With IMKB being the 8th best performing market in the world since the beginning of 2007 with growth over 11%, and one of the best markets of the emerging markets, I can’t understand why more people won’t stand up and take notice after this IPO. Already 2 more IPO's are lined up - details to come.

UPDATE on the UPDATE: Due to recent volatility in the international markets starting with China and the US, the IMKB has taken somewhat of a dive this past week.

Referens- Last week' s IPO by TAV Airports Holding oversubscribed 18 times

Financial Times- IPO has Turkey back in vogue

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Posted @ 14:16   0 Comments

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