The owner of Turkey’s best-performing equity fund expects its merger with a larger rival will give the combined firm scope to boost assets under management a further 40 per cent by the end of 2020, reported Bloomberg.
The tie-up between Istanbul Portfoy Yonetimi and Actus Portfoy Yonetimi will give the nation’s second- and third-largest money managers total assets of almost TRL 4 billion ($693 million). That compares with the local unit of Azimut Holding, which has TRL 7 billion under management.
Baris Hocaoglu, the Chief Executive of Istanbul-based Actus, said, “The aim is to grow the combined company’s assets to $1 billion and the deal is expected to be completed by the end of this year.”
By increasing their scale, the companies hope to draw more investors at a time when funds around the world are struggling to compete with passive investments such as exchange traded funds.
Istanbul Portfoy, which manages the Turkish equity portfolio of Norway’s sovereign wealth fund, will control 65 per cent of the combined entity. Actus owns the balance and has the option to increase this stake to 75 per cent, with the help of an international investor, said Hocaoglu.
“We are in talks with an international investor, if we agree, it may have 24 per cent stake in the final entity and Actus 51 per cent,” said Hocaoglu.
The firm is also in talks with international financial institutions and development financiers to seek backing for a $150 million fund that will invest in distressed assets, added Hocaoglu.
The size of each investment, which would include loans under close watch or equity in companies that have working capital troubles, could be about $20 million and Actus—which has about 10 funds—will act as a service provider to the new fund’s partners.
The firm’s equity fund, Actus Portfoy Hisse Senedi Fonu, has returned 63 per cent so far this year, outperforming all other similar funds in the country.
Actus and Centricus Asset Management, a buyout firm founded by former Deutsche Bank bankers Michele Faissola and Nizar Al-Bassam as well as ex-Goldman Sachs Group banker Dalinc Ariburnu, dropped a plan to raise a $1 billion fund to invest in infrastructure projects, said Hocaoglu.