Investment Banks clamor toward Turkey; Scoop up Brokerages and Licenses

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.

15 March 2007

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

The Carlyle Group, the US buyout firm, has boosted its new Middle Eastern group with the opening of an office in Turkey and the hire of a managing director. Can Deldag was formerly a partner at Ernst & Young, the accountancy firm, where he was head of transaction advisory services for Turkey and head of mergers and acquisitions for south-east Europe.

March 1, 2007

As posted previously, Standard Bank is to acquire a majority shareholding in Dundas Ünlü Menkul Degerler A.S. (Dundas Ünlü), a fully licensed securities and brokerage house in Turkey.
Standard Bank Press release

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