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New Investment Opportunities for Master Funds Schemes in Turkey

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Business world firstly threw master funds opinion into the pot in 2011. After two years, this attempt currently came into climax with government support. The structure of this mechanism has already determined that will provide 500 million TRY capitals to Small and Medium Sized Enterprises (SMEs).

An undersecretary of Treasury is willing to support foreign investment funds for the purpose of developing some promising sectors in Turkey. Nevertheless, some requirements are stipulated by government, shall be met by potential private equity applicants.

Highlights of Master Funds Project

  • Founder of the investment fund must play a part in a private equity which generates more than 25 million TRY annual revenue at least two years.
  • Portfolio manager of the private equity in point, shall act a role of any investment decision at least five companies or other private equities.
  • Portfolio manager also must succeed in one exit decision subject to any investment on behalf of private equity.
  • The main target of this project is canalizing foreign investments into technology-oriented areas. Moreover, highly value-added investments will be taken into account primarily.
  • 5 principle funds are projected to appear regarding government support.
  •  A principle fund will be able to invest in up to five private equities. Therefore, 25-30 private equities are anticipated to benefit from this master fund.

New Incentive Model: Financial Free Zone in Istanbul

In line with master fund setup in Turkey, new incentives may reveal regarding corporate tax exemption and land allocation for necessary investments in appropriate industries. As is known, a new by law regulated for angel investments in the early 2013. In the light of these regulations, angel investors’ benefit from corporate tax reduction in case of they meet requirements which was drawn by Undersecretaries of Treasury. In parallel with these amendments for angel investments, a new legislation may be expected for private equities when they actively commence on operations and new investments under "Master Funds Scheme" as a financial free zone player. Mobilization of capital towards to Turkish market is aimed with all these opportunities and benefits.

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