| Blue Voyage Partners Exit AFM Cinemas |
| 04 November 2007 |
As posted in the TDN (Velios buys AFM’s 51.9 percent shares), it appears AIG Blue Voyage achieves an exit from one of their longtime investments after just re-entering Turkey. I'm a bit short of time as of late, so here are the main points from the article:
 Turkish cinema company AFM sold more than 50 percent of its shares to the Velios Ltd., a subsidiary of Russian Alfa Group Consortium Tuesday evening. The estimated price of the shares is to be around $28.5 million, however, the final price will be set after closing.
This led the previous owners of the company, Akdemir family and AIG Blue Voyage Fund L.P., to sell all their shares except for the 10 percent belonging to Ahmet Adnan Akdemir, AFM founder.
A statement made to the Istanbul Stock Exchange (IMKB) said that 51.9 percent of AFM shares (owned by AIG Blue Voyage Fund L.P., Yalçın Selgur, Mehmet Berent Akdemir, M. Sedat Akdemir, Fatma Füsun Akdemir, Ahmet Adnan Akdemir and Yusuf Agah Tansev) were sold to Velios Ltd. for $28.5 million.
AFM's market value
"The market value of the company is around $59 million but for the deal we calculated it to be $55 million. $28.5 million is not the final price, it may change after closing agreements," CEO Akdemir said yesterday.
Ahmet Adnan Akdemir remained a shareholder of the company with 10 percent. "I am also going to remain in his position as the CEO of AFM Sinemacılık for at least two more years," he added.
The deal also included an optional arrangement providing that Ahmet Adnan Akdemir's remaining shares will not be able to purchased within a year but later they will also be open to a sales agreement between two parties.
 Alfa Group is a Russian consortium that is operating on many different business areas, including financial services, oil and gas production, technology, retail trade, telecommunications and media. The consortium is known in Turkey for its investment on Turkish GSM operator Turkcell. As of April 2007, the group together with its telecommunications subsidiary Altimo holds 27 percent of Turkcell shares.
AFM is Turkey's nationwide largest cinema circuit with 183 screens around the country and the first and only entertainment company listed in İMKB since October 2004. Close to 38 percent of the company shares are offered publicly and 90 percent of these publicly offered shares are owned by foreign firms such as Morgan Stanley.
AFM is expected to continually expand, especially with this new Russian partner, and a burgeoning shopping center boom in Turkey. I find it interesting (and a coincidence?) that just my last post was regarding the AIG Blue Voyage Fund (AIG Rehires and Re-Enters Turkish Buyout Market with Blue Voyage Advisors). It can only be speculated that the rehires and Blue Voyage's resurgence back in Turkey may have been tipped off by the momentum of this deal.
AIG originally bought a minority holding into AFM for an estimated $7 million in 2000. Again, we can only speculate on their rate of return (if any) on this deal, since there are others involved in the exit.
 Technorati Tags: AIG, Blue Voyage Fund, Private Equity, Investments, Deal Flow, Turkey, Buyout, Alfa Group, Venture Capital, exitsLabels: AIG, Alfa Group, Blue Voyage Fund, Buyout, exits, Investments, Private Equity, Turkey, Venture Capital
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| AIG Rehires and Re-Enters Turkish Buyout Market with Blue Voyage Advisors |
| 21 October 2007 |
According to the Wall Street Journal, AIG is again making a push to enter the Turkish buyout/venture space. Setup in 2000, the AIG Blue Voyage Fund was a $100m (€72m) fund dedicated to private equity investing in Turkey.
Of course you may remember that those were tough times to put together a fund {with the country nearing elections, the 2001 crisis, and the devaluation of the lira}. Nonetheless, the spirit of putting together a private equity fund in Turkey was commendable and they were able to make three acquisitions of companies in the consumer and entertainment sectors which included AFM Theaters and Galatasary Sportif by 2004. Perhaps it was the trouble with board member shifts at Galatasaray that made them lose heart? Even so, the fund deliberately slowed its investment pace from 2002 to 2004 and by 2005, the fund closed with only 30% of its capital committed. Aside from Blue Voyage, however, last year AIG Capital was able to regain some ground in Turkey, taking a stake in For You, a discount fashion retailer with branches across the country.
Well, that was then and this is now. Serkan Elden, who spent six years setting up AIG's business in Southeast Europe, has been rehired to fill the post of president and chief executive for Blue Voyage Advisors. He will also be given the title of managing director of AIG Capital Partners, and will be responsible for boosting the firm's investment activity in Turkey. Elden originally left AIG Blue Voyage in 2004 to setup his own boutique investment advisory firm, 3 Seas Capital Partners, a firm that still exists today. From there, he became chief executive of Fintur Holdings BV, a joint venture of Turkcell and TeliaSonera, and a provider of mobile telecommunication networks servicing Azerbaijan, Kazakhstan, Georgia and Moldova.
So, per my last post regarding KKR's acquisition of UN Ro-Ro, and re-emergence of the AIG Blue Voyage Fund, it is interesting to note the direction of the trend. Again, we will have to wait and see who in Turkey is ready for the next buyout deal, and who will enter next.
For future reference, all of these Turkish funds and PE firms can be found in the PE/VC Index in the left sidebar.
Technorati Tags: AIG, Blue Voyage Fund, Private Equity, Investments, Deal Flow, Turkey, Buyout, Southeastern Europe, Venture CapitalLabels: AIG, Blue Voyage Fund, Buyout, Investments, Private Equity, Southeastern Europe, Turkey, Venture Capital
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| The Home Run Mentality in Venture Capital: the 80/5 Principle |
| 10 August 2007 |
As an American that misses baseball, and in the spirit of the boys of summer, I can't help but mention that Barry Bonds hit his 756th All-time Home Run on August 7th, breaking Hank Aaron's long-standing record of 755 set in 1974. Despite the controversy over steroid use, we must remember that Babe Ruth did it on hot dogs and beer, and it is an incredible moment in baseball history and for its fans. Way to go, Barry!
Within the reference of the home run, in my last post regarding Guy Fraser-Sampson's book, Private Equity as an Asset Class, I highlighted a very interesting statistic regarding the need for Venture Capitalists to "swing for the benches" and look for home runs when making investments. GFS had a very interesting chart in his book that observed this statistic from the famous data released from Horsley Bridge. Last week, a lot of traffic came from search criteria looking for this very data. Here are the basics that I have somewhat reproduced here:
The idea is that an investment in a potential "home run" at 5% of cost to the fund will produce 80% of total returns for the fund. This is not to say that it is easy, but VC's should be aggressive in this mentality to get this type of return. GFS reminds you to please not confuse this concept with buyout funds. The concept of having a home run mentality does not really work for the buyout space. However, we could see this principle go down in history (courtesy of Horsley Bridge) much like in comparison with the 80/20 rule. Its an impressive statistic and is very telling as to why the Netscapes, the Googles, and the YouTubes of the world are every VC's objective.
Now if only we can get something to come out of Turkey in comparison.
Technorati Tags: Private Equity as an Asset Class, Guy Fraser-Sampson, Venture Capital, Private Equity, Home Run, Horsley Bridge, investment, 80-05 Rule, Barry Bonds, VCLabels: exits, Home Run, Investments, statistics, Venture Capital
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Publisher: Jon H. Black
