Banks race to open first hedge fund in Turkey
Posted by meb at April 5th, 2008
Two major Turkish banks are engaged in a big race to become the first Turkish bank to offer hedge funds. İş Invest (İş Yatırım Menkul Değerler), an Istanbul-based brokerage, said in an e-mailed statement Friday that it received the approval of the Capital Markets Board, the state financial markets regulator, on March 28 to open a hedge fund.
The Capital Markets Board has issued rules to oversee the hedge fund market, fund manager Emrah Yücel told Bloomberg in a phone interview Friday. Thefund at İş Invest will need to be registered with the board and will have an initial YTL 30 million ($23 million) under management, he added.
The hedge fund will primarily have a relative-value strategy to minimize risk, although it may sometimes use a market- directional strategy, Yücel said. The fund is for qualified investors and will invest mainly in Turkish assets in any available instruments, he added.
The İş Invest’s announcement comes one day after Garanti Bank, the Turkish lender co-owned by General Electric Co., said it received approval to open Turkey’s first hedge fund. The fund initially will have about YTL 500 million ($388million) under management, Istanbul-based Garanti said Thursday in an e-mailed statement.
The fund will have a long-short, market-directional strategy and will use three times leverage, Chief Strategist at Garanti Asset Management Sinan Akiman told Bloomberg in a phone interview. Garanti plans to charge a 1.5 percent management fee and 15 percent performance fee, he added.
The fund, which will be a unit of Garanti Asset Management, will “primarily” invest in Turkish assets, the bank said. The minimum investment amount will be YTL 1 million and as much as 80 percent of the fund will be sold abroad, Akiman said. Garanti will open the fund after presentations to potential investors in May, Akiman added.
Turkey’s Capital Markets Board approved the fund, the bank said. Hedge funds are mostly private pools of capital whose managers participate substantially in the profits from their speculation on whether the price of assets will rise or fall. They typically seek clients with at least $1 million to invest.
Source: Turkish Daily News
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