G43 Anatolian Venture Capital Fund Project launched today

The EIF and the Turkish Ministry of Science, Industry and Technology have launched a new project today, aiming at supporting SMEs in the least developed areas of Turkey.

The SMEs will benefit from the establishment of a venture capital fund, the G43 Anatolian Venture Capital Fund (G43), which will enhance their access to finance. This initiative is being made possible thanks to the cooperation between the European Union, the Ministry of Science, Industry and Technology, the SME Development Organisation of Turkey (KOSGEB), the EIF and Istanbul Venture Capital Initiative (iVCi). The fund is expected to be created in the second half of 2012 with a target size of EUR 30 million. It will invest in 8-12 companies in the target region.

At the launch of the project, Mustafa KAPLAN, President of KOSGEB stated: “G43 is a bold project for Turkey because it combines a sophisticated asset class such as risk capital with the needs of fast growing SMEs in the least developed regions of Turkey. This is a good project which shows the strength of our Government when supporting risk capital and which works together with iVCi, our Government’s fund of funds programme in which KOSGEB is a major player.”

Richard PELLY, Chief Executive of the EIF added: “We are delighted to extend our experience in Europe to the Anatolian region of Turkey, and in particular South-Eastern Anatolia. With this fund, we are continuing our support for SMEs in Turkey. This project is an important milestone for the Turkish risk capital industry as well as for further enhancing the access to finance of Turkish SMEs.”

A signature ceremony between the Government of the Republic of Turkey, represented by the Honourable Minister of Science, Industry and Technology, Mr. Nihat ERGÜN, and the Chief Executive Office of the EIF, Mr. Richard PELLY, has taken place in Ankara. Other leading figures, including the Chairman of the SME Development Organisation of Turkey (KOSGEB), Mr. Mustafa KAPLAN, the Chairman of the Board of Directors of iVCi, Mr. Tuna ŞAHİN, the Director of the Central Finance and Contracts Units (CFCU), Mr. Muhsin ALTUN and Mr. Javier MENENDEZ BONILLA, the EU representative were also present at the launch event.

A call for expression of interest is being conducted in order to select a fund manager that will manage G43. The fund will be supported to a great extent by the European Union’s Instrument for Pre-Accession Assistance (IPA) and the Istanbul Venture Capital Initiative (iVCi), Turkey’s fund of funds programme. IPA and iVCi combined will commit EUR 16 million to G43. The fund will target the 43 most disadvantaged regions of Turkey, where there is considerable growth potential. At least 50% of the fund size will be invested in the South-Eastern Anatolia Region.

G43 is the second project launched by the Ministry of Science, Industry and Technology and the EIF under IPA with the support of the European Union.

About the Ministry of Science, Industry And Technology

Ministry of Science Industry and Technology is the operating structure of Regional Competitiveness Operational Programme (RCOP) in Turkey. Programme is co-funded by European Union’s Instrument for Pre-Accession Fund and Republic of Turkey. RCOP’s main objective is to increase the competitiveness level of 43 provinces located in relatively less developed part of Turkey -namely target region- by both investing in improvement of business environment and by supporting the strengthening of the enterprise capacity and fostering entrepreneurship with a total budget of 352 million Euros for 2007 – 2011 period. G43 project is funded so as to contribute the creation and development of innovative financing solutions for the target region.

About KOSGEB

Established in 1990, KOSGEB is the public agency tasked with supporting the development of Turkish SMEs through various programmes and services. KOSGEB’s operations include operation of public incubation centres and joint use technology service centres. Based in Ankara, KOSGEB operates an extensive network of regional offices and centres. KOSGEB participates in several specialised financing vehicles for SMEs in Turkey.

About EIF

EIF's central mission is to support Europe's micro, small and medium-sized businesses by helping them to access finance.  EIF designs and develops equity (venture and growth capital), guarantees and microfinance 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. EIF’s equity investments aim to leverage its own funds and those managed on behalf of mandators. The EIF total net commitments to private equity funds amounted to over EUR 5.4bn at end 2010. With investments in over 300 funds, the 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 commitment in guarantees totalled over EUR 14.7bn in close to 160 operations at end 2010, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.

In Turkey, EIF is investor with EUR 50m in the Istanbul Venture Capital Initiative (iVCi), which it also advises. It also directly invests in several private equity funds with total exposure of over EUR 170m. EIF also manages the Greater Anatolia Guarantee Facility (GAGF) and has guarantee commitments of over EUR 60m.

About iVCi

Established in November 2007, Istanbul Venture Capital Initiative (iVCi) is Turkey’s first ever dedicated fund of funds and co-investment programme. Total fund commitments amount to EUR 160 million from public and private investors such as Small and Medium Industry 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 the adviser to iVCi.