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.

Actera Group Closes Actera Partners Fund at $475 Million
The Actera Group has finally closed their Actera Partners fund at over $475 million according to an AltAssets report. This would be a new Turkish fund record, and would most likely bring 2007 to a close with an increase in the private equity funding pool of over $1 billion.

Believe me when I tell you, I have seen a google search come from every country on this site, so Actera's reach has spread far and wide, whether it be through their road shows or due dilagence. Indeed, according to the statement, "commitments came from pension funds, multilateral institutions and sovereign wealth funds from North America, Europe, the Far East and the Middle East."

The main points of the statement include:
Actera Partners will focus primarily on buy-out and growth equity investments across various industry sectors in Turkey. In addition, the fund seeks to partner with Turkish companies to support their expansion to other countries.

The fund has already completed its first transaction. In partnership with US buy-out giant TPG it has invested in Turkish spirits company Mey Icki Sanayi.

Isak Antika, managing partner and co-founder of Actera Group, said, 'Turkey is undergoing a fundamental transformation which is reshaping its economic landscape and underpinning its convergence with the developed economies of the world. Given the size of the Turkish economy, such convergence will result in substantial value creation opportunities.'
So, congratulations go to the gentlemen operating Actera Partners, Isak Antika (of Antika Partners) and Murat Cavusoglu (previously of the George Soros SE Europe Fund/Bedminster Capital). Since starting the fund in early 2007, they truly have done a lot to promote Turkey to the rest of the world. Now, it is only a matter of time before we see more PE come to Turkey. Private equity in Turkey has finally started to blossom, and the world is finally taking note of the small-mid-large cap opportunities that are awaiting investment, especially as funds have continually gotten bigger. This still confirms a gap, and venture capital can only be next as one of Turkey's great potential opportunities that await investment.

For some more background on Actera and one of Grandstanding Traction's most popular posts, please visit, "New Turkish PE Fund by Actera Partners to welcome Canadian Pension Funds to Turkey"

The Actera Group website is still under construction.

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Posted @ 22:47   0 Comments
Interview: Mehtap Özkan - GoldenHorn Ventures
Mehtap (Mae) Özkan, founder of GoldenHorn Ventures, was kind enough to be interviewed via email concerning her fund, and about venture capital and entrepreneurship in Turkey. I am not suprised that Mae is someone that is very passionate about entrepreneurship in Turkey and also the part that she plays in supporting that end. For an overview of GoldenHorn Ventures, you can visit the GoldenHorn Ventures website (www.goldenhornventures.com). You can also visit the GoldenHorn Ventures Blog.

I think it is very telling when, speaking of Golden Horn, Senior Investment Officer at the IFC, Ralph Keitel, states, "I believe the Turkish market currently offers excellent investment opportunities for early-stage VC firms such as GoldenHorn Ventures which understand the challenges of entrepreneurs in a globalized world." I'll let Mae tell you the story. This will be the first part of that interview.

THE FUND - GoldenHorn Ventures

Tell us something about your background and how did it evolve into venture capital?

I was an entrepreneur. I had been involved with numerous startups and technology companies. I have a technical background, I started my career as software engineer and mathematician. Then I started founding technology companies and had to understand the business as well as technology. At least, I pretend to understand.

What brought you back to Turkey?

The passion to change the world! I can do it in a much wider scale then I used to.

How did you get your start as a VC?

I was coming back to Turkey and I was seeing all the ideas and projects disappearing after a while and people start doing mainstream jobs instead of realizing their dreams. That was very frustrating for me, because they were coming up with innovative technologies.

I started thinking about what the idea owners needed to become world changing companies. That is more crucial for the emerging markets, because you can change the world so much faster when you are in an emerging country, if you can. Then I started spending a lot of time thinking what would be the right investment model for a VC in Turkey, what is needed, etc.

I have come to a conclusion that more than the money, people who needed success are needed in the region. Success stories are needed. People who know and have been successful are needed.

Another exciting part of being a VC in the emerging country is you set up the rules. You train and teach everybody what venture capital is, how it is structured etc, from the attorneys to the entrepreneurs. Yes, it is very time consuming but it is very rewarding as well.

VC business used to be an old and very private community. That is changing as well. The VC business needs to go through a revolution. Silicon Valley and all the other set players have a hard time understanding what it would become. We have a shot there too.

All these exciting changes and my belief in innovation coming from emerging countries made me think what I know would be very valuable in Turkey. I can leverage myself and help create a self-sustaining ecosystem by investing all I have here – and I don’t mean only time and knowledge, but money, connections, emotions, really everything. So, I took a major decision and started fund-raising for GoldenHorn Ventures. That was 2 years ago. But the idea and modeling is a 5 year-process.

Then I was fortunate enough to meet my partners in Turkey. They are very courageous and open minded with great connections and experience. It is very hard to find partners who are so visionary as well as experienced and practical.

When was GoldenHorn Ventures formed?

GoldenHorn Ventures was formed very recently in August 2007, launched September 2007. The fund size is $25 Million, but we are raising more meanwhile and trying to have $50 M for this fund.

Where are you in the VC Cycle - fundraising/investing/divesting?

We are investing at the moment, but also preparing for a second close.

What will be your typical investment size?

$500 K to $3 Million. Our average investment size is $2.5 M.

How long will your typical exit period be?

We are looking at 3 to 5 years.

What position(%) are you typically taking in a company?

It really depends on the stage of the company we are dealing with as well as the valuation and how much money will take the company to the next stage. I can’t say we wouldn’t get in deals less than 30% or 20%. This will be untrue. Our preference is to take minority stakes.

Can you provide us with some details about some of your investments?

Yogurt Technologies, we are betting on a virtual world idea that connects your real identity with the virtual one. As well, there are a few nanotech projects that are quite interesting.

We tend to get excited for ideas that can be a global phenomenon. In addition yes we also look at some companies in the Internet space as well. But we really believe in innovative and disruptive components in ideas or companies.


As a VC focusing on Turkey, what are some of the biggest problems/challenges you encounter when looking for and investing in Turkish entrepreneurs?

We end up training everybody on what Venture capital is. That is a problem but also an opportunity.

Would you invest in Turks outside of Turkey? Or consider investing in Turkish companies and exporting them to countries that would facilitate their entrepreneurial ideas better (ie. Silicon Valley)?

Yes, definitely, We require a headquarters or idea production/ realization facility in Turkey. But we focus on creating international companies rather than only Turkish companies.

Overall, what suggestions do you have for a Turkish entrepreneur looking for VC funds?

Be bold,
Be honest,
Change the world.


Why is the Turkish VC space still such a fledgling industry?

Because there are no success stories yet,
People tend to go after easy money,
Venture Capital requires entrepreneurial knowledge instead of just a pure finance background.

What are the typical concerns by LP's/potential fund investors in a Turkish fund?

People were laughing at me when I started talking about a technology VC in Turkey. The biggest concern was the deal flow, which is easy to prove. I have flown so many people here (investors and VCs eg. DFJ) to show the ideas and companies. The other concern is the exit strategy.

What do you think the government could do to promote:
  • Entrepreneurship/Innovation
  • The Turkish VC Industry

Let people work free. I don’t think there is much the government can do. Of course they can start programs like Yozma, but I am not really sure that governments understand entrepreneurship or startups. The best they could do is let people work free, decrease the bureaucratic steps, etc.

Being less bureaucratic as well as more entrepreneur friendly is very important.

Is the strategy and focus of Turkish VC's different from your stereotypical VC?

It has to be different in any emerging country.

I think being a good VC is about reading weak signals and detecting good ideas, good teams and good companies from those weak signals. There are many differences being a VC in an emerging country and, for example, the US.

  • Weak signals are even weaker in the emerging countries.
  • There is no ecosystem to support entrepreneur/idea owners or an entrepreneurial VC, so as a VC you need to disseminate your beliefs, bets, without getting tired, bring the value together from anybody possible to make things happen.
  • For example in the US, the companies pretty much know what a VC expects so they tell the story according to what is being expected. That is good and bad. Good because it is easier to evaluate but bad because you are creating an environment assuming the finance world is more valuable than the ideas or idea owners. So you can actually miss big ideas just because they don’t know your rules of doing business. However, In emerging worlds, you need to understand the world of the entrepreneur/idea owner.

There are so many more differences but these are the ones that come to my mind first.

What are your predictions for the future of the Turkish VC space?

There will be more and more. The space will change very fast. There are many opportunities being a VC in Turkey, not only in technology but in many spaces. Soon, the education process will not be as tiresome and long and people will know what venture capitalists do. If we are good, than the idea of venture capitalism will be positive such as us being supporters, people who know things and support the idea owners not only with money but with experience and connections.

That is the main difference between a good VC and a bad VC. The good adds great value to a company. They praise the entrepreneur and the idea owner. They know that finance is just the means, it is not what matters, but the idea matters.

{ --- End of Interview ---}
For those entrepreneurs interested in submitting their business plans (or .ppt's ;-))to GoldenHorn Ventures, I urge you to check out the GoldenHorn Ventures website.

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Posted @ 21:18   0 Comments
Brokerage House Acquistions in Turkey - MNG to Lehman Brothers
Since this has been such a hot area as of late, I figured I might as well put them all in one location. Six Turkish Brokerages get snapped up by foreign buyers in the last 2 years. In addition, for a clear timeline of these acquisitions as well as other deals in the making with international investment banks, don't forget to check out a previous post: "Investment Banks clamor toward Turkey; Scoop up Brokerages and Licenses". In addition, for some of the acquisitions, you will see links that allow you to drill down to its specific Grandstanding Traction post.

Here are the latest brokerage house acquisitions of Turkish brokers by foreign buyers.

Brokerage House Acquisitions in Turkey
Bank Date Acquirer Acquired % Amount Paid
Arigil Securities Nov. 2006 Morgan Stanley 100% Undisclosed
Tat Securities Dec. 2006 Merrill Lynch 100% Undisclosed
Dundas Unlu Securities March 2007 Standard Bank 67% Undisclosed
Baran Securities May 2007 Credit Suisse 100% Undisclosed
Opus Securities Sept. 2007 Citigroup 100% Undisclosed
MNG Yatirim Securities Oct. 2007 Lehman Brothers 100% Undisclosed

The latest being 100% of MNG Yatirim to Lehman Brothers. Here were the details as of the signing in July:

Hergüner Bilgen Ozeke ("Hergüner") of Istanbul, Turkey represented Lehman Brothers Co. in its purchase of all of the shares of MNG Yatirim, a local brokerage house owned by the MNG Group of Companies (“MNG”). The deal was signed on 27 July 2007, and closing of the transaction is subject to the Capital Market Board’s (the “CMB”) permission. The parties applied for this approval on 30 July 2007. Provided that the deal is approved by the CMB, this transaction will allow Lehman Brothers to own a local brokerage house, which holds all CMB licenses, except for derivative transactions. Lehman Brothers, an innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients, and high net-worth individuals worldwide. Founded in 1850, Lehman Brothers maintains leadership positions in equity and fixed-income sales, trading and research, investment banking, private investment management, asset management and private equity. The Firm is headquartered in New York, with regional headquarters in London and Tokyo, and operates in a network of offices around the world. Hergüner’s team was led by partner Mr. Hakki Gedik, who is also co-head of the firm's banking and finance division. Other members of the team were associates Mrs. Yesim Api Samli, Mr. Umut Gurgey, Mr. Ali Sami Er, and Ms. Nilay Goker. Legal counsel for MNG was Ms. Asli Budak.

Here is Reuter's take on the Lehman/MNG deal.

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Posted @ 22:15   0 Comments

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