A Venture Capital Investment Trust (GSYO) is a type of investment trust.
Companies like REITs serve as a link between entrepreneurs and venture capitalists, allowing both sides to benefit. It has been stated that detailed issues related to investment trusts will be handled by the Capital Markets Board (the “Board”), which regulates the establishment and operation of investment trusts. On the basis of the Board’s “Communiqué” on principles for Venture Capital Investment Trusts,
These organisations’ goals are outlined in the relevant sections of their Communiqué, which states that they are attempting to develop or create tools and equipment, as well as new products or services that can be used in both the agricultural and industrial sectors. Companies that invest in businesses with a high growth potential and can achieve these goals with the help of management, technical, or capital assistance are joint stock companies. GSYOs may also engage in transactions that fall within the scope of the Communiqué’s regulations, but this is not their primary focus.
Real estate investment trusts (REITs) may either be established directly, or they may be converted from a joint stock company in accordance with the applicable capital market legislation. If there is a contrary provision in the Turkish Commercial Code No. 6102 regarding joint stock companies, REITs are subject to the provisions of the capital market legislation, unless otherwise stated.
GSYOs must adhere to the system of registered capital. A cap on the board of directors’ authority to raise capital is sought in order to quickly and easily meet the company’s capital requirements. However, joint stock companies whose basic capital system is not GSYO-compliant can also request an application from the Board for conversion. There should be no less than 20,000,000 TL in the company’s initial capital, the current paid or issued capital, and the equity capital in the financial statements prepared in accordance with the Board regulations and independently audited. It is also necessary to commit to the public offering of 25% of the capital or the sale to qualified investors. There must be a lead shareholder from one of the company’s founding or current partners.
As a means of ensuring that the bridge-like GSIOs are controlled in the market and preventing the parties they bring together from being confused, it is imperative that the GSYOs’ trade names include the phrase “Venture Capital Investment Trust.” Additionally, certain requirements are being sought for the company’s founding partners, board members, and general managers. There will be continuity with qualified personnel in carrying out the duties of GSYOs as defined by capital market legislation.
Are there different types of REITs based on their supply model?
In the open market, the public offering system is used by REITs, whose shares are traded on the stock exchange and thus are available to all investors. Under Turkish law, all publicly traded real estate investment trusts (REITs) must adhere to the above-mentioned registered capital model, must have a minimum capital of 20.000.000,00 TRY, and must have a majority shareholder who is also the majority shareholder.
In the absence of a privileged share in the partnership, the lead shareholder is the owner of the shares that control management alone or in combination, according to the Communiqué. If a privileged share in the partnership exists, the lead shareholder is the owner of the shares that provide management control alone or in combination, according to the Communiqué. The majority of the preferred shares are owned by one or more of the partners with a stake of at least 25% in the company.
In order for REITs to limit their public offering to qualified investors, their articles of incorporation must be followed. Capital Markets Board’s Introductory Guide defines qualified investors as professional customers, including those defined in the Board’s regulations on investment institutions and recognised as such based on market demand.
There is no requirement to be a leading investor in REITs using the offering to qualified investors model, in contrast to the public offering model, and the minimum capital requirement is set at 5,000,000,00 TL. Additional conditions for qualified investors’ purchases are outlined in the Communiqué.