YASED Conference November 9 , 2005

1. PRIVATE EQUITY IN TURKEY YASED ConferenceNovember9, 2005 Kerem Onursal VP

2. Turkven is an independent Private Equity Fund focused on Turkey FUND OVERVIEW • Global know-how and track record • USD10 billion • Local know-how and network • USD44 million Source: Turkven

3. Turkven is an independent Private Equity Fund focused on Turkey FUND OVERVIEW We have equityand preferential access to long term debt • Global know-how and track record • USD10 billion • Local know-how and network • USD44 million • Our Shareholders Source: Turkven

4. Turkven is an independent Private Equity Fund focused on Turkey FUND OVERVIEW We have equityand preferential access to long term debt • Global know-how and track record • USD10 billion • Local know-how and network • USD44 million • Our Shareholders • Our Portfolio • III • IV • X • … Source: Turkven

5. We invest in companies to grow them. SMART MONEY Deal partner Deal Type Entrepreneur Shareholder Expansion Capital • Turkven provides capital for growth and our portfolio companies become partners of IFC, FMO, DEG and EIB, important sources of long term debt Source: Turkven

6. We invest in companies to grow them. SMART MONEY Deal partner Deal Type Entrepreneur Shareholder Expansion Capital • Turkven provides capital for growth and our portfolio companies become partners of IFC, FMO, DEG and EIB, important sources of long term debt Passive Shareholder Share Sale • Turkven can buy the shares of passive shareholders and strengthen the shareholding structure of the company Source: Turkven

7. We invest in companies to grow them. SMART MONEY Deal partner Deal Type Entrepreneur Shareholder Expansion Capital • Turkven provides capital for growth and our portfolio companies become partners of IFC, FMO, DEG and EIB, important sources of long term debt Passive Shareholder Share Sale • Turkven can buy the shares of passive shareholders and strengthen the shareholding structure of the company Professional Manager Management Buy-Out & Buy-In • Turkven can provide funds to professional managers who would like to buy their companies (“management buy-out”) or become a shareholder and top executive in another company (“management buy-in”) Source: Turkven

8. We invest in companies to grow them. SMART MONEY Deal partner Deal Type Entrepreneur Shareholder Expansion Capital • Turkven provides capital for growth and our portfolio companies become partners of IFC, FMO, DEG and EIB, important sources of long term debt Passive Shareholder Share Sale • Turkven can buy the shares of passive shareholders and strengthen the shareholding structure of the company Professional Manager Management Buy-Out & Buy-In • Turkven can provide funds to professional managers who would like to buy their companies (“management buy-out”) or become a shareholder and top executive in another company (“management buy-in”) Conglomerates or State Spin-Offs • Turkven buys majority (up to 100%) stakes in non-core companies from conglomerates through “spin-offs” Source: Turkven

9. We invest in companies to grow them. SMART MONEY Deal partner Deal Type Entrepreneur Shareholder Expansion Capital • Turkven provides capital for growth and our portfolio companies become partners of IFC, FMO, DEG and EIB, important sources of long term debt Passive Shareholder Share Sale • Turkven can buy the shares of passive shareholders and strengthen the shareholding structure of the company Professional Manager Management Buy-Out & Buy-In • Turkven can provide funds to professional managers who would like to buy their companies (“management buy-out”) or become a shareholder and top executive in another company (“management buy-in”) Conglomerates or State Spin-Offs • Turkven buys majority (up to 100%) stakes in non-core companies from conglomerates through “spin-offs” Banks Recapitalizations • Turkven works with banks on the “recapitalization” of companies with borrowings Source: Turkven

10. We are meeting 15 new companies from all sectors every month, and select those with strategic exit potential. TARGET INDUSTRIES Industry • Pharma • Logistics • Automotive Parts • Business Services • Food and Beverage • Durable Goods • Packaging • Chemicals • Construction Mat. • Media • ... • Start-Ups Comment • Generic manufacturers with market share • 3PL services • System manufacturers • Services to blue-chip clients • Strong brand and distribution • Component manufacturers • High end food packaging • Focused players with high market share • Focused players with high market share • Radio, Outdoor, Services • ... • Only proven management teams Source: Turkven

11. We investUSD5-50 million of equity per deal We are meeting 15 new companies from all sectors every month, and select those with strategic exit potential. TARGET INDUSTRIES Industry • Pharma • Logistics • Automotive Parts • Business Services • Food and Beverage • Durable Goods • Packaging • Chemicals • Construction Mat. • Media • ... • Start-Ups Comment • Generic manufacturers with market share • 3PL services • System manufacturers • Services to blue-chip clients • Strong brand and distribution • Component manufacturers • High end food packaging • Focused players with high market share • Focused players with high market share • Radio, Outdoor, Services • ... • Only proven management teams Source: Turkven

12. We investUSD5-50 million of equity per deal SIZE DOES MATTER ! We are meeting 15 new companies from all sectors every month, and select those with strategic exit potential. TARGET INDUSTRIES Industry • Pharma • Logistics • Automotive Parts • Business Services • Food and Beverage • Durable Goods • Packaging • Chemicals • Construction Mat. • Media • ... • Start-Ups Comment • Generic manufacturers with market share • 3PL services • System manufacturers • Services to blue-chip clients • Strong brand and distribution • Component manufacturers • High end food packaging • Focused players with high market share • Focused players with high market share • Radio, Outdoor, Services • ... • Only proven management teams Source: Turkven

13. Private equity investment in Turkey have been negligible, at a rate of 2 investments per annum at USD8 million per deal. HISTORY OF TURKISH PRIVATE EQUITY * Currently not active Source: Turkven Private Equity

14. Private equity investment in Turkey have been negligible, at a rate of 2 investments per annum at USD8 million per deal. HISTORY OF TURKISH PRIVATE EQUITY Turkey’s PE industryneeds success stories * Currently not active Source: Turkven Private Equity

15. Turkey has growth, but the informal economy and valuation expectations put a damper on the number of deals done. DOING DEALS IN TURKEY - 2005 ü • Key Reasons to Invest • Dynamic, high growth economy • Availability of companies and management Source: Turkven

16. Turkey has growth, but the informal economy and valuation expectations put a damper on the number of deals done. DOING DEALS IN TURKEY - 2005 ü • Key Reasons to Invest • Dynamic, high growth economy • Availability of companies and management • Open issues • Economic volatility • FDI to enable strategic exits • Valuation levels • Availability of leverage for buyouts A predictableEU accession path will mitigatesome issues Source: Turkven

17. Turkey has growth, but the informal economy and valuation expectations put a damper on the number of deals done. DOING DEALS IN TURKEY - 2005 ü • Key Reasons to Invest • Dynamic, high growth economy • Availability of companies and management • Open issues • Economic volatility • FDI to enable strategic exits • Valuation levels • Availability of leverage for buyouts A predictableEU accession path will mitigatesome issues • Key Reasons NOT to Invest Robust and enforceableagreements and governance structure are crucial • Large informal economy distorting competition and profitability • Weak judicial system Source: Turkven

18. Turkish companies present multiple challenges for institutional investors. INVESTING IN TURKISH COMPANIES • Challenge • Explanation • Difficulty to determine past performance of companies • Inflation + Macro volatility + Lack of management accounting Source: Turkven

19. Turkish companies present multiple challenges for institutional investors. INVESTING IN TURKISH COMPANIES • Challenge • Explanation • Difficulty to determine past performance of companies • Unrealistic valuation and control expectations • Inflation + Macro volatility + Lack of management accounting • Volatility increases the option value of being a shareholder and control Source: Turkven

20. Turkish companies present multiple challenges for institutional investors. INVESTING IN TURKISH COMPANIES • Challenge • Explanation • Difficulty to determine past performance of companies • Unrealistic valuation and control expectations • Relative scarcity of focused, pure play companies • Inflation + Macro volatility + Lack of management accounting • Volatility increases the option value of being a shareholder and control • Focused companies may be less robust in volatile markets Source: Turkven

21. Turkish companies present multiple challenges for institutional investors. INVESTING IN TURKISH COMPANIES • Challenge • Explanation • Difficulty to determine past performance of companies • Unrealistic valuation and control expectations • Relative scarcity of focused, pure play companies • Scarcity of companies with aggressive growth plans • Inflation + Macro volatility + Lack of management accounting • Volatility increases the option value of being a shareholder and control • Focused companies may be less robust in volatile markets • Leverage and fixed costs are deadly in crises – adverse selection Source: Turkven

22. Turkish companies present multiple challenges for institutional investors. INVESTING IN TURKISH COMPANIES • Challenge • Explanation • Difficulty to determine past performance of companies • Unrealistic valuation and control expectations • Relative scarcity of focused, pure play companies • Scarcity of companies with aggressive growth plans • Long and complicated shareholder agreements • Inflation + Macro volatility + Lack of management accounting • Volatility increases the option value of being a shareholder and control • Focused companies may be less robust in volatile markets • Leverage and fixed costs are deadly in crises – adverse selection • Insufficient minority rights in the commercial code Source: Turkven

23. Turkish companies present multiple challenges for institutional investors. INVESTING IN TURKISH COMPANIES • Challenge • Explanation • Difficulty to determine past performance of companies • Unrealistic valuation and control expectations • Relative scarcity of focused, pure play companies • Scarcity of companies with aggressive growth plans • Long and complicated shareholder agreements • Inflation + Macro volatility + Lack of management accounting • Volatility increases the option value of being a shareholder and control • Focused companies may be less robust in volatile markets • Leverage and fixed costs are deadly in crises – adverse selection • Insufficient minority rights in the commercial code IT IS STILL DIFFICULT TO CLOSE DEALS! Source: Turkven

24. Turkey is becoming more attractive for FDI, but we still havea long to-do list. MACRO GOVERNANCE CRITERIA • What matters most? • Enforceability of legal rights • Quality of accounting standards • Predictability and level of taxation • Administrative efficiency of government • Effectiveness of banking sector • Effectiveness of regulatory system Source: Turkven, Checklist from McKinsey Quarterly, 2001

25. Turkey is becoming more attractive for FDI, but we still havea long to-do list. MACRO GOVERNANCE CRITERIA • What matters most? • Enforceability of legal rights • Quality of accounting standards • Predictability and level of taxation • Administrative efficiency of government • Effectiveness of banking sector • Effectiveness of regulatory system We havea long list of things to be done! Source: Turkven, Checklist from McKinsey Quarterly, 2001

26. Turkey is becoming more attractive for FDI, but we still havea long to-do list. MACRO GOVERNANCE CRITERIA The optimists:Turkey is an EU convergence play, there will be further growth! • What matters most? • Enforceability of legal rights • Quality of accounting standards • Predictability and level of taxation • Administrative efficiency of government • Effectiveness of banking sector • Effectiveness of regulatory system We havea long list of things to be done! Source: Turkven, Checklist from McKinsey Quarterly, 2001

27. Turkey is becoming more attractive for FDI, but we still havea long to-do list. MACRO GOVERNANCE CRITERIA The optimists:Turkey is an EU convergence play, there will be further growth! • What matters most? • Enforceability of legal rights • Quality of accounting standards • Predictability and level of taxation • Administrative efficiency of government • Effectiveness of banking sector • Effectiveness of regulatory system We havea long list of things to be done! The pessimists:Turkey has a great future and it will always stay that way! Source: Turkven, Checklist from McKinsey Quarterly, 2001

28. The FDI flows are driven by a land-grab mentality accompanied by privatizations. FOREIGN DIRECT INVESTMENT FLOWSUSD Million SELECTED DEALS Target - Acquirer Equity Completed Expected 2005 TEB – BNP Paribas Disbank – Fortis Turkcell – TeliaSonera Veh. Inspection (TUVSUD) YKB – Uni Credito Sekerbank – Rabobank Digiturk – tbd Eregli Steel – tbd Turk Telekom – tbd Garanti – tbd Basak Sigorta – tbd Botas Total 217 1.280 3.100 183 1.000 350 200 1.000 2.500 3.000 100 n/a 3.000-12.000 GSM License Sale 2006 Tupras – tbd Cement – tbd Tekel – tbd Telsim – tbd Star TV - tbd National Lottery – tbd Tedas - tbd Total 2.000 400 1.300 2.000 150 500 n/a 5.000-6.000 Source: Turkven

29. Abdi İpekci Caddesi 23/5, Orjin Han, 80200 Nişantaşı, İstanbul Tel: +90 (212) 291 56 30 - Fax: +90 (212) 291 56 36 www.turkven.com

30. Over 80% of foreign direct investment is for market share. STRATEGIC INVESTOR PERSPECTIVE Goods Services Strategic exit potential is higher for firms with dominant local market share and strong distribution channels MarketSeeking TariffJumping EfficiencySeeking Source: McKinsey Quarterly, 2004

31. UNO leads the branded, packaged bread market and is an attractive target for global players. • MAY 2003 UNO IS SHAPING THE INDUSTRY 2003-200535% CAGR • Key facts is transforming the bread market to an FMCG market, leading the industry in hygiene, nutritional value and product range • UNO was the first venture backed leveraged buy-out in Turkey • Turkven-Advent-Doruk bought 100% from Dogus Holding • The total bread market in Turkey is over USD6 billion, with less than 1% branded (< USD60 million) • UNO is the leading packaged bread company in Turkey5 times larger than the next biggest competitor • The company grew 100% in yearly sales to over USD30 millionsince our investment • We have also doubled the number of distribution points and introduced 22 new SKUs with a new advertising campaign • Mr Hasip Gençer, the Founder of UNO-Doruk, and a serial entrepreneur acts as the CEO Source: Turkven

32. Intercity is Turkey’s largest long term fleet rentalcompany with over 7000 cars as of H1 2005. • AUG 2004 INTERCITY IS GROWING EXPONENTIALLY 2003-200575% CAGR • Key facts • Intercity has been the biggest PE deal in Turkeywith over USD78 million in equity and long term debt • The total long term rental fleet in Turkey consists of 35’000 cars today and will grow to 400’000 in the next 10 years • Long term fleet rental is part of a larger outsourcing trendworld-wide and will continue to grow rapidly • Intercity leads the sector with 7000 vehicles, the best clients, the lowest costs and access to cheaper foreign funding • The company grew from 1200 to 7000 cars in 3 years • 7000 vehicles cost roughly USD140 million • Mr Vural Ak, the CEO and Founder of Intercity is a real entrepreneur and car aficionado. (Off-road national champion) is transformingthe embryonicfleet rental market to aprofessionally-run operational leasing market Source: Turkven

33. August 20, 2004 – February 18, 2005 Turkven Private Equity Advent International Corporation International Finance Corporation DEG & FMO have providedUSD78’550’000 in equity and long terms loans to Ekim TurizmTicaretve SanayiLimited Sirketi The deal was advised by Dundas & Ünlü, Lexence, DWS Guner, White&Case Mazars Denge, Hamelink vd Tooren, Houthoff Institutional Shareholders

34. The economic and political stability of Turkey has improved due to structural reforms and a single party government. TURKEY’S TRANSFORMATION 2005is proving to be a year of stability , growth and increased FDI flows GDP CAGR ‘94-’04 = 7% GDP Single Party Coalitions Crisis & Reforms GDP: USD280 b Population: 70 m Inflation: 8% GDP Growth: 7% Inflation Source: Turkven

35. Turbulant times in 2001 and 2002 THE CRISIS AND THE REFORMS • 2001-2002 • Feb 2001 -Coalition government collapsed • USD currency peg and twin deficits • loss of credibility • Popular question: Brazil or Argentina? • Technocrat government passed structural reforms • Independent Central Bank with inflation target • Program and USD20 billion package with IMF • Clean-up of state banks and weak banks • Consolidated state budget • Fiscal discipline and primary surplus program with IMF • November 2002 - First single party government in a decade Transition from coalition governments to a single party government Source: Turkven Private Equity

36. Stability in 2003 with the help of IMF STRUCTURAL REFORMS • 2003 The government inherited a disciplined and realistic IMF program • Primary balance +6.5% of GDP • Inflation target 25% down from 80% • Increased strategic importance due to Iraq and Afghanistan • Low global interest rates supporting emerging market debt • Increased exports to Russia and neighbouring markets As a result: • Trade deficit dropped • Investments in capital goods increased • Inflation slowed down ü ü ü The single party government stuck to the reforms and reaped the benefits immediately ü ü ü ü ü Source: Turkven Private Equity

37. 2004 was the turning point for the Turkish economy EUROPE? • 2004E • The good … • Inflation on target 9% • GDP grew 10% in while the state sector shrank • 000’000 is dropped with New TL (1 USD = 1.4 YTL) • Capital expenditure peaked (23% of GDP) • Cyprus PR success • Tourism boom (up 30%, USD15b revenues) • The challenges … • Domestic debt real interest rate still at 10% (22% nominal) • Jobless recovery - > Limited consumer demand • Trade deficit of USD30b (Imports 95b – Exports 65b) • Public debt / GDP = 220 / 260 = 85% The EU granted a date to start negotiations Source: Turkven Private Equity

38. … and may be the ideal form of financing for companies with significant value growth potential. Value growthcan come from the top-line or bottom-line FINANCING GROWTH • Partnership alternative • Explanation May not be suitable for long-term growth plans as the majority of debt available is usually short-term, variable rate and asset-backed, requiring a mortgage. Debt has serious consequences if the business does not perform. IPO is difficult to plan due to the volatility in stock exchanges, is limited in size and brings reporting requirements. A depressed stock price is a problem when negotiating with strategic investors. More appropriate for companies that have completed their growth and value-creation cycle as most strategic investors will require majority ownership and control. Helps company grow faster without liquidity riskthrough equity and long termdebt support. Providesnegotiating power to portfolio company during negotiations with customers, suppliers and potential investors. Nocontrol requirement. DEBT EQUITY through IPO EQUITY from STRATEGIC PRIVATE EQUITY Partnership for growth Source: Turkven