Focused force
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| Uzay Kozak |
The global financial crisis has created a large number of financial entrepreneurs around the world. In Turkey, three of the country’s most senior bankers have left their international banking backgrounds to found a new advisory and asset management business called Fokus. "We decided not to work for a big institution again, especially as we have seen what happened to Lehman Brothers’ equity," says Uzay Kozak, one of the three managing partners of the firm. Kozak used to run Lehman’s regional business as well as being its chief executive for Turkey. If anyone can see the benefits of independence, it is him.
But the motivation for Fokus is about more than not working for a big banking group again. Underlying changes in the Turkish financial markets give further support to the business. "The Turkish financial markets have become much more liberalized in the past five years," says Kubilay Cinemre, managing partner of Fokus, who previously ran Bank of America Merrill Lynch’s business in Turkey. "In our circles of competence the game has changed and the local market now needs new financial intermediaries to match the gap between the needs of the market and the services that are on offer."
Specifically, Fokus looks to advise small and mid-sized companies with the level of investment banking advice that has been available to only the very largest companies. "Outside the top-10 holding companies, clients are not getting good services," says Cinemre. "Local banks own the clients but they know everything about them and see the relationship mainly through the eyes of a creditor. That is where we can make a difference."
With Turkey’s economy growing as fast as it is, there are many opportunities to help medium-sized companies grow and internationalize. "The clear opportunity in a country like Turkey is that the SME sector now needs a level of service that they were not getting beforehand," says Kozak.
The third partner in the business is Faruk Isik, who used to be chief operating officer of Bank of America Merrill Lynch’s Turkish operations. He says the firm is looking to build an asset management business alongside its advisory service. Initially this will run managed accounts for high-net-worth individuals but will then move into mutual funds and hedge funds. The asset management side can also invest in deals brought by the advisory side. This will benefit from the deal-flow visibility on the advisory side, while also providing the business with a more stable income stream than the more lumpy advisory cashflows. It is a classic merchant banking model.
"In terms of timing this is as good as it gets," says Cinemre. "The regulations are getting better, inflation is down and there is a good monetary policy environment." The challenge will be getting smaller clients to pay for advice while deftly managing the conflicts inherent in running an advisory and asset management business together. But with their international banking pedigree, the three partners will have the right experience of what to do and what not to do.
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Sector: Advisory and asset management
Fertile crescent: Crescent Capital
Sector: clean energy investing
Sector: corporate finance
A growth partnership: Pera Capital Partners
Sector: private equity
Freedom to perform: Libera Capital
Sector: Asset management/hedge funds