Frequently Asked Questions
Who Can Establish GYFs and GSYFs?
Authorized by the Capital Markets Board:
● Portfolio management companies
● Real estate and venture capital portfolio management companies
can establish.
Who Can Invest in GYFs and GSYFs?
Only qualified investors may invest in the funds.
What Is a Qualified Investor?
Apart from institutional investors such as banks, brokerage firms, and insurance companies; individuals whose financial assets, including cash deposits and capital market instruments they own,
1,000,000 Turkish Lira
are defined as qualified investors if the total exceeds this amount.
How Is the Value of Participation Shares Calculated?
Participation shares have no nominal value. The unit value of the fund is calculated by dividing the total value of the fund by the number of participation shares.
How Often Is the Price of Participation Shares Calculated?
The unit value of the fund is calculated at least once a year.
How Can I Buy Participation Shares?
You can carry out the transactions by contacting the relevant portfolio management company for buying and selling participation shares.
How to Exit from Fund Participation Shares?
In perpetual funds, exits from participation shares can be made by returning them to the fund under the conditions stated in the issuance document or by transferring them to qualified third-party investors. In term funds, the exit is done automatically at the end of the term.
Is It Possible to Sell, Return, or Transfer GYF Participation Shares Between Investors?
Participation share sales are conducted by paying the full unit value in cash or by transferring the corresponding partnership shares to the fund.
The return of participation shares to the fund can be carried out by converting them into cash under the terms stated in the issuance document, or by transferring the corresponding partnership shares to the investors.
The terms for the sale and return of participation shares must be determined in line with the fund’s portfolio structure and included in the disclosure documents.
For term funds, it is possible to return participation shares to the fund only at the end of the fund’s term, as stated in the disclosure document.
It is possible to transfer participation shares between qualified investors. To transfer, the transferee individual and/or institution must prove that they meet the criteria of a qualified investor.
What Are the Authorities and Responsibilities of the Fund Founder?
According to the relevant Communiqué provisions of the Capital Markets Board, the fund founder is responsible for ensuring that activities related to the representation of the rights of participation share holders and management under trust ownership principles are carried out and audited in accordance with the internal statute and issuance document provisions.
Which Institution Audits the Operations?
All accounts and transactions of the fund founder, the portfolio manager (if any), and the custodian concerning the fund are subject to supervision by the Board. Additionally, independent external auditing is required.
Is My Investment and Money Safe?
The participation shares you acquire are held by a portfolio custodian operating with the authorization of the Capital Markets Board and are recorded with the Central Registry Agency. Additionally, the fund’s financial statements are subject to independent auditing.
Can the Fund's Assets Be Pledged or Shown as Collateral?
The fund's assets are separate from the assets of the founder, portfolio custodian, and portfolio manager.
The fund's assets cannot be pledged or used as collateral except as specified in the legislation and fund disclosure documents. The fund's assets cannot be disposed of for other purposes, cannot be seized including for public receivables, cannot be subject to precautionary measures, and cannot be included in bankruptcy estates. Debts and liabilities of the founder and/or portfolio manager to third parties and receivables of the fund from the same third parties cannot be offset against each other.
In Which Areas Can GYFs Invest?
The fund can invest in all types of real estate and rights based on real estate. For the purpose of making trading profit or earning rental income:
● Land
● Plot
● Residence
● Office
● Shopping Mall
● Hotel
● Logistics Center
● Warehouse
● Park
● Hospital
● It can buy, sell, rent, lease, and promise to buy or sell all similar types of real estate.
At least 80% of the fund's total value must consist of real estate investments.
Can Assets Other Than Real Estate Be Included in the GYF Portfolio?
Up to 20% of the fund's total value can be invested in private sector and public debt instruments, time deposits and participation accounts, investment fund participation shares, repo and reverse repo transactions, lease certificates, warrants and certificates, and other investment instruments approved by the Capital Markets Board, and included in the fund portfolio.
How Are Real Estates to Be Included in the GYF Portfolio Determined?
Real estates to be included in the fund are determined by the Investment Committee composed of expert members with experience in real estate investments and financial markets, within the scope of relevant Communiqué provisions.
Can a Closed (Private) GYF Be Established?
Yes, allocated real estate investment funds can be established for real or legal persons with wide real estate ownership. The fund undertakes full management of the real estates it invests in, including physical issues, leasing, operation, and maintenance.
Are There Any Restrictions Related to the GYF Portfolio?
At least 80% of the fund's total value must consist of real estate investments.
Up to 20% of the fund's total value may be invested in shares of joint stock companies whose financial statements show that at least 75% of their total assets consist of domestic real estate investments, prepared according to applicable legislation.
What Are Other Asset Groups That GYFs Can Invest In?
Investments can be made in the following assets, provided that they do not exceed 20% of the fund's total value:
● Shares of joint stock companies established in Turkey, private sector and public debt instruments
● Foreign private sector and public debt instruments and joint stock company shares
● Time deposits and participation accounts
● Repo and reverse repo transactions
● Lease certificates
● Warrants and certificates
● Takasbank money market transactions
● Cash collaterals and premiums for derivative instruments
● Specially designed foreign investment instruments approved by the Board
● Other investment instruments approved by the Board
How Is the Custody of Assets in the GYF Portfolio Managed?
Assets in the fund portfolio must be kept at a custody institution authorized by the Board. Information, documents, and records proving the existence and fund ownership of assets that cannot be physically or book-entry kept are also kept by the portfolio custodian.
Real estates, rights based on real estate, and securities based on real estate in the fund portfolio are registered in the land registry in the name of the fund.
In Which Areas Can GSYFs Invest?
● Shares of joint stock companies established in Turkey, including those under privatization, private sector and public debt instruments.
● Foreign private sector and public debt instruments and joint stock company shares.
● Time deposits and participation accounts.
● Investment fund participation shares.
● Repo and reverse repo transactions, transactions carried out in commitment markets and forward contracts.
● Lease certificates and real estate certificates.
● Warrants and certificates.
● Takasbank money market transactions and domestic organized money market transactions.
● Cash collaterals and premiums of derivative instrument transactions.
● Mortgage and asset-backed securities, secured securities, specially designed foreign investment instruments approved by the Board, and loan participation notes.
Are There Any Restrictions on the Investments GSYFs Can Make?
At least 80% of the fund's total value must consist of one or more venture capital investments.
If direct investments made by the fund within an accounting period to venture companies meeting the qualifications specified in the SME Regulation exceed 10% of the fund’s total value, the 80% investment limit is applied as 51%.
What Are the Advantages of GYFs?
● Funds are transparent structures established by Portfolio Management Companies licensed by the Capital Markets Board and subject to continuous audit.
● The investment areas of the fund are professionally determined by the Investment Committee composed of experienced and expert members in real estate investments and financial markets.
● Diversification is achieved by including high-return potential real estates located in different locations and various types of real estates from land to shopping malls in the fund portfolio, allowing investment with minimal risk.
● Real estate investment fund investors share in rental incomes and value increases of the real estates in the fund portfolio.
● There is an opportunity to acquire Turkish citizenship (with the condition of holding at least 500,000 $ worth of GSYF or GYF for at least three years).
● Operational processes such as maintenance, dues, electricity, water, tenant, and rent collection are followed and fulfilled by portfolio management companies.
● It is possible to include real estate acquired at more favorable prices benefiting from economies of scale into the fund.
● Real estates with amounts too high to be acquired individually can be purchased collectively by funds.
● It is possible to eliminate risks that may arise if an investor who is not familiar with the sector acts alone.
● In case of urgent cash needs, it is possible to sell participation shares equal to the required cash instead of selling the entire real estate.
Why Should I Invest in GYF Instead of Buying Real Estate?
Although real estate investments are quite popular in our country, renting real estates, tracking payments, and maintenance bring certain disadvantages. At the same time, the large amount required for real estate investment is also a significant problem.
Real estate investment funds allow investors to invest in a large number of large-scale real estates in the fund portfolio. Thanks to diversification, investors minimize their risks.
Also, since the fund undertakes the management of the real estate including leasing, operation, and maintenance, the investor saves operational costs and time.
Do Foreign Investors Have the Right to Acquire Turkish Citizenship through Fund Investment?
Foreigners identified by the Capital Markets Board who purchase real estate investment fund participation shares or venture capital investment fund participation shares worth at least 500,000 USD or equivalent foreign currency or Turkish Lira and hold them for at least three years have the exceptional right to acquire Turkish citizenship.
Are There Tax Advantages in GYFs and GSYFs?
There are significant tax advantages for both the fund itself and the investors in GYFs and GSYFs.
For the fund:
● All earnings of the fund are exempt from corporate tax.
● Dividends and earnings obtained by individual investors investing in the funds are exempt from income tax. Earnings from investments in GYFs are limited only by %17.5 withholding tax and are not declared.
Purchase and sale contracts related to real estates in the fund portfolio and real estate sale promise contracts are exempt from stamp duty.
