A Local LP Perspective on TURKEY VC/PE Market ‘A Qualitative Interim Epilogue’ A. Mete ÇAKMAKCI Technology Development Foundation of Turkey The PEI Turkey Forum – Partnering for Growth 24 November 2009, İstanbul
The PEI Turkey Forum : TTGV 2009 2 The Story Life in İstanbul is a strong attraction for national and international talent Still affordable to live in İstanbul Istanbul has become an Eurasian hub (proved by recent growth of THY) Government plans to develop İstanbul as the financial center as well as many other including creative industries and software. Demographics : A blessing or a curse? Quality of education, growth performance still remain as challenges So far strong labor elasticity for the expanding services With recent increase in personal wealth, Turkey is becoming a hard to ignore emerging market Public funded many mega infra-structure projects, recently BOT models and privatization is picking-up to maintain a modern infrastructure Investor and private enterprise friendly political climate Economic reforms continuing, particularly in healthcare and social security
The PEI Turkey Forum : TTGV 2009 3 TTGV : Who are we?
A public private partnership established in 1991 with a mixed government-private sector representation and 41 full time staff
Legal status is “foundation established under law” which qualifies TTGV for government funding under Turkish law
Program agency operating the public soft loan scheme towards private manufacturing sector innovation projects
Investor in TURKVEN TPEF-1, İşGirişim A.Ş., iVCi (İstanbul Venture Capital Initiative) andTeknolojiYatırım A.Ş.
Recently introducing pilot scale programs towardspromotingclean/renewable technologies in the industry. (soft loans)
Partnered with EIF to setup iVCi, actively involved withthe fund raising activities both from public and private investors
Founded Teknoloji Yatırım, the only dedicated early stage generalist technology investment vehicle in Turkey
The PEI Turkey Forum : TTGV 2009 5 Structuring the Issue INVESTORS MANAGEMENT REGULATORY FRAMEWORK INVESTEES The common platform is the alignment of interests...
The PEI Turkey Forum : TTGV 2009 6 Regulatory Framework
Turkey is fairly advanced in its economic openness. (No limitations on foreign ownership, transfers and double-taxation treaties with most well regarded host countries) = = local framework is irrelevant for sophisticated investors
BUT, for many local investors, a workable local regulatory framework is critical. CMB is the unwilling regulator
A competent regulator MUST appreciate, the business exists as long as there are willing and able investors
Like most other cases, improperly designed tax incentives are blocking proper regulation for VC/PE in Turkey
Interests of independent minority investors are lost in the mix
Reliable data and strong representation is needed to develop a good conduct sector and market
Arı Teknokent Arı 2 Binası A Blok Kat:7 İTÜ Ayazağa Yerleşkesi Koru Yolu Maslak 34469 İstanbul, TURKEY www.teknolojiyatirim.com.tr Cyberpark, Cyberplaza B Blok Kat:6 Bilkent 06800 Ankara, TURKEY www.ttgv.org.tr Photos : kind courtesy of METUTECH