Alternative investment funds are funds that mainly hold alternative investment instruments in their portfolio other than the traditional financial instruments (stocks, debt instruments, cash, etc.) that traditional investment funds invest in. Depending on the investment strategy of the alternative investment fund, the principal you invest may also be lost. In addition, these funds are usually issued with a certain maturity and there may be various restrictions on exiting before maturity. This reduces the liquidity of these funds. For this reason, it is recommended that these funds be used by people who are more experienced and knowledgeable in financial matters, and only qualified investors can invest in these funds within the framework of capital market legislation. The primary alternative investment vehicles that alternative investment funds invest in are venture capital and real estate investments. In addition, flexible managed hedge funds without any investment vehicle or management strategy limitations, financial assets such as derivatives, and tangible assets such as art and cars are also examples of alternative investments. The liquidity of alternative investment vehicles is lower compared to traditional investment vehicles. Instead of investing directly in alternative assets, you can achieve portfolio diversity with professional analysis and management by investing in alternative investment funds offered on Fonmap.
According to the Capital Markets Board (CMB) regulations, qualified investors are professional clients, including those defined in the CMB's regulations on investment institutions and those who are considered professionals on a demand basis. • Local and foreign investment funds, • Pension funds, • Investment partnerships, • Brokerage houses, • Banks, • Insurance companies, • Portfolio management companies, • Mortgage finance institutions, • Retirement and aid funds, • Foundations, • Funds established in accordance with the temporary article 20 of the Social Security Law No. 506, • Public benefit associations, • Other investors whose qualifications are similar to these institutions, as determined by the CMB, • Examples of qualified investors include real and legal persons who own Turkish and/or foreign currency and capital market instruments worth at least 1 million TL as of the date of public offering of fund participation shares.
A 10% withholding tax is applied on the profits realized in the Money Market, Debt Instruments, Precious Metals, Fund Basket and Participation funds investing in TL assets, Variable, Mixed, Eurobond, External Debt, Foreign, Free and investment funds that include the expression "foreign exchange" in their title.
Income tax exemption is applied to the return of participation shares of funds that are stock-intensive funds (at least 80% of the fund's total value consists of issuer shares traded on BIST, excluding securities investment trust shares) to the relevant fund. No withholding tax is paid on the gains arising when participation shares held for more than one year are disposed of in investment funds whose portfolio consists of at least 51% of stocks traded on BIST.
The first possible date for entry into the relevant funds is the date the fund starts issuance. After the fund's issuable shares are exhausted, new entries into the fund are not accepted. The entry and exit dates for each GYF and GSYF are specified in the issuance document. You can see when you can receive participation shares during the "issuance" phase from this issuance document.
The fund is closed when the issuable shares are exhausted.
Portfolio, in a broad sense, refers to all assets owned by a person or organization.
Fund issuance refers to the sale of fund participation shares issued by the founder or manager of the fund, with or without a public offering. In other words, the process in which the fund first starts selling is called fund issuance. Investors can buy participation shares after the fund issuance starts.
An investment fund is an investment vehicle where different investors with similar risk perceptions combine their savings in a common pool, and the amount accumulated in the pool is evaluated by professional managers in various money and capital market instruments. Professional fund managers work to achieve optimum returns for fund participants (investors) by changing positions in the securities within the funds, adhering to the strategies of the funds. Investment funds are non-legal entities established by portfolio management companies with the internal regulations for the purpose of operating a portfolio on behalf of the savers, in accordance with the principles of fiduciary ownership, with the money or other assets collected from savers in return for participation shares. Each investor becomes a partner in the fund portfolio by purchasing a participation share representing a portion of the fund's portfolio.
Participation shares show how many shares the investor has in the fund portfolio. We can compare participation shares in investment funds to partnership shares in companies. Similar to investors becoming partners in companies by purchasing partnership shares and having rights over the relevant company, participation shares are also purchased in investment funds to become partners in the fund portfolio. However, while partnership share holders can participate in the company management, participation share holders do not have the right to participate in fund management. Participation shares carry the rights of the investor and show their participation in the fund. Participation shares are recorded in separate accounts opened in the name of investors under the relevant portfolio depository institution within the Central Registry Agency (CRA).
The suitability test is a standard test applied by authorized institutions that offer individual portfolio management or investment consultancy before offering products and services to their customers. The written test, the suitability test, evaluates your financial situation, knowledge and experience of the products offered; as a result of this evaluation, it is determined whether you are compatible with the service you want to receive. The score of this test shows whether you can receive individual portfolio management or investment consultancy services.
Securities investment funds : Securities investment funds can invest in the following instruments: • Shares, private sector and public debt instruments of issuers established in Turkey, including those included in the scope of privatization • Foreign private sector and public debt instruments and issuer shares that can be traded within the framework of the provisions of Decree No. 32 on the Protection of the Value of the Turkish Currency • Term deposits, participation accounts and deposit certificates with a maturity of not more than 12 months • Gold and other precious metals and capital market instruments issued based on these metals, provided that they are traded on the stock exchange • Fund participation shares • Repo and reverse repo transactions • Lease certificates • Real estate certificates • Warrants and certificates • Takasbank money market transactions • Cash collateral and premiums of derivative instrument transactions • Specially designed foreign investment instruments and loan participation certificates deemed appropriate by the Board • Other investment instruments deemed appropriate by the Capital Markets Board (CMB) Considering the securities to be included in the portfolio, 10 different umbrella fund types have been defined by the CMB. These fund types are as follows: • Debt instruments umbrella fund • Equity umbrella fund • Precious metals umbrella fund • Fund basket umbrella fund • Money market umbrella fund • Participation umbrella fund • Variable umbrella fund • Free umbrella fund • Guaranteed umbrella fund • Protection umbrella fund The type of fund indicates which assets the portfolio is mainly composed of. Since the profit of an investment fund depends on the return on the assets it holds in its portfolio, it would be appropriate for investors to choose the fund they will invest in after learning about the type of fund, in other words, the composition of the portfolio. Exchange Traded Funds (ETF) : These are investment funds that are based on an index or commodity, aim to reflect the performance of the index to investors, and whose shares are traded on the stock exchange. They invest in the assets within the index or commodity they are based on in proportion to their weight in the index. These funds reflect the return of the shares in the index they are based on or other instruments (gold, foreign exchange, etc.) and carry the risk. Foreign investment funds : Foreign investment funds are investment funds or collective investment organizations established abroad. Venture capital investment funds (VCIF) : VIF is a non-corporate entity established by portfolio management companies and VC portfolio management companies for a limited period of time with an internal regulation in order to operate a portfolio consisting of VC investments and other financial assets and transactions permitted by law, in accordance with the principles of fiduciary ownership, with the money collected from qualified investors in return for participation shares or participation shares, on behalf of the shareholders. At least 80 percent of the total value of VC investment funds that allow qualified investors to invest in VC consists of VC investments. Venture capital investment can be made through different methods such as direct or indirect partnership, providing financing structured as a combination of debt and equity financing (mezzanine finance) to VCs, and purchasing debt instruments issued by VCs. In order to invest in GSYFs, which are established for the purpose of becoming a partner in non-public companies with high growth potential through capital transfer, share transfer or founder of venture companies, it is necessary to be a qualified investor. Real estate investment funds (REIF): REIF is an entity that does not have a legal personality and is established by portfolio management companies and real estate portfolio management companies with an internal regulation for a limited or indefinite period of time in order to operate a portfolio consisting of real estates, real estate-based rights and other financial assets and transactions permitted by legislation, based on the principle of fiduciary ownership, with the money collected from qualified investors in return for participation shares. It is mandatory that at least 80 percent of the total value of real estate investment funds that allow qualified investors to invest in real estate assets consists of real estate investments. It is necessary to be a qualified investor to invest in REIFs, which are established to offer real estate investments to investors at more accessible amounts and in a structure that takes the responsibilities of real estate acquisition such as title deeds, fees, valuation, etc. off the investors (investment fund structure), thus securitizing real estate investments.
As the central depository institution of the Turkish capital markets, the Central Registry Agency Inc. (MKK) provides its members with custody, data storage and reporting, corporate governance and investor services. The assets you invest in Fonmap are recorded and monitored on a customer basis at the Central Registry Agency and are kept in custody accounts opened in your name at a custody institution authorized by the Capital Markets Board.
The assets in the portfolios of collective investment institutions must be delivered to an institution that provides portfolio custody services to be kept in a separate custody account opened on behalf of these institutions. Portfolio custody institutions are institutions that are responsible for the custody of financial assets belonging to collective investment institutions, keeping records, verifying and monitoring the ownership of other assets, keeping records, and controlling the execution of transactions related to asset and cash movements.
Venture capital investment funds (VCIFs) are funds established for a specific period. A VCIF can be established for a period of 7 or 10 years and the last 2 years of the fund period are usually determined as the liquidation period. The fund's issuance document specifies the fund period and liquidation period. Real estate investment funds can be established for a fixed or indefinite period, but they are generally indefinite. In limited-term REIFs, automatic exit is essential at the end of the term, but exit can also be made during the fund period if specified in the issuance document. In case of indefinite REIFs, exit can be made by returning the fund participation shares to the fund within the framework of the conditions specified in the issuance document.
The process of closing the relevant fund at the end of the term during the liquidation process, returning the fund participation shares belonging to the investors to the founder of the fund, and the founder paying cash to the investors in return for these participation shares is called redemption (liquidation).
Savers can evaluate their savings by purchasing securities from companies, brokerage firms or stock exchanges. However, investing in securities requires knowledge and expertise. In addition, since individual savings generally do not reach sufficient size, portfolios created with them are risky portfolios. This risk may be in terms of the principal as well as the return on the portfolio. For this reason, investment funds and investment partnerships called collective investment institutions have been established in the capital market. Collective investment institutions are called investment partnerships when they are established as a separate and independent legal entity according to their legal structure, and investment funds when they are established by another legal entity within the framework of a contract (internal regulations).
In funds established on the basis of fiduciary ownership, the fund founder (portfolio management company) owns the fund as a fiduciary. Savers grant the founder the authority to conduct transactions related to the fund. This transfer of authority occurs through the fund's internal regulations. The founder must manage/have the fund managed within the framework of this contract (internal regulations) and by protecting the rights of savers.
Investment risk can be defined as the probability of losses occurring relative to the expected return on a particular investment. In other words, investment risk is a measure of the level of uncertainty in obtaining returns according to the investor's expectations.
Mutual funds are classified as open-ended or closed-ended. Open-ended investment funds are funds that do not have any limitations on the number of fund participation units. Therefore, investors can buy or sell in the relevant fund at any time within the conditions specified in the fund issuance document and/or prospectus. Closed-end investment funds can be classified as those other than open-end funds. Closed-end funds generally have a certain maturity (usually 3 to 5 years) and the fund's issuance and redemption dates are predetermined. For example, the participation shares of the relevant fund cannot be repurchased and/or sold before a certain period. For this reason, the liquidity of open-end funds is higher than that of closed-end funds.
Funds created with a "single fund, single asset" strategy follow a strategy of investing in a single security, transaction or purchase. This strategy also allows the investor to know which asset they are investing in through the fund.
Alternative investment funds do not pay corporate tax. If individual investors sell their participation shares after two years of purchase, the income tax withholding is "zero". Otherwise, the withholding rate is 10 percent.
Investment funds allow individuals to diversify their investments to a degree that they cannot provide with their own means, as they offer the opportunity to invest in a portfolio that includes many different financial instruments instead of a limited number of financial instruments. This situation is called the principle of risk distribution . Thanks to their large-scale portfolios, investment funds can invest in many more stocks, bonds, bills, precious metals and other investment instruments. In this way, they are minimally affected by any decrease in the price of an investment instrument.
In the world of startups, unicorn is the name given to new startups that reach a valuation of $1 billion. The concept formed with this word was first used by Aileen Lee in 2013 and its popularity has increased day by day. It is an expression used to underline the difficulty and rarity of reaching the $1 billion valuation target for startups.
Startups with a valuation exceeding $10 billion are called decacorns, while those with a valuation exceeding $100 billion are called hectocorns.