Both institutions have committed up to EUR 60 million each with a target size of EUR 250 million at final closing as it is expected that other local partners will join the initiative.
The Turkish Growth and Innovation Fund of Funds succeeds the Istanbul Venture Capital Initiative (iVCi), Turkey’s first Fund of Funds which was launched in 2007 and is now fully committed. The new fund will be advised by EIF and invest into growth capital funds, whilst also tapping into the infant but very dynamic early stage segment which is developing rapidly.
Werner Hoyer, President of the European Investment Bank Group signed the commitment on behalf of EIF in Ankara today.
Richard Pelly, Chief Executive of the European Investment Fund, states: “This new Fund of Funds builds on the experiences that we have gained during the past six years of pioneering work under iVCi in the Private Equity sector in Turkey. It would not have been possible without the close cooperation between EIF and KOSGEB; our partnership approach will ensure the continuation of a long-term investment scheme that we expect to deliver a significant stimulus to equity investments into growth-focussed enterprises. The EIF is seeking to strengthen its relationship with national promotional institutions, and our cooperation with KOSGEB is a prime example of this strategy.”
Mustafa Kaplan, President of KOSGEB, adds: “The European Investment Fund is a key partner for us. We have seen their approach towards Fund of Funds first-hand and their keen interest on building partnerships with local players. The new initiative will focus on growth and innovation, both key challenges for our institution and for Turkey. We are convinced that other public and private partners will join this initiative and confident that with their support, we will reach our target fund size.”
The Turkish Growth and Innovation Fund builds on iVCi, which to date has supported nine funds with a tenth expected to be closed in July. Overall, a total of EUR 134.5 million has been committed to date to funds managed out of Istanbul.
European Investment Fund
EIF's central mission is to support Europe's small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture capital and guarantees instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. The EIF total net commitments to private equity funds amounted to over EUR 6.9bn at end 2012. With investments in over 435 funds, EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. The EIF guarantees loan portfolio totalled over EUR 4.7bn in close to 255 operations at end 2012, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.
Established in 1990, KOSGEB is the public agency tasked with supporting the development of Turkish SMEs through various programs and services. KOSGEB’s operations include operation of public incubation centers and joint use technology service centers. Based in Ankara, KOSGEB operates an extensive network of regional offices and centers.
Istanbul Venture Capital Initiative (iVCi)
Established in November 2007, Istanbul Venture Capital Initiative (iVCi) is Turkey’s first dedicated Fund of Funds and co-investment programme. Assets under management amount to EUR 160 million from public and private investors including the Small and Medium Enterprises Development Organisation of Turkey (KOSGEB) , the Technology Development Foundation of Turkey (TTGV), the Development Bank of Turkey (TKB), Garanti Bank, the National Bank of Greece Group (NBG Group) and the European Investment Fund (EIF). EIF is advising iVCi. iVCi is now fully committed.