1. PRIVATE EQUITY IN TURKEY İlhami Koç June 2008

2. 2 SMEs are having trouble in finding the sources to finance their growth. 2 MAJOR CHARACTERISTICS OF TURKISH FINANCIAL SECTOR Significant Savings Deficit Dominated by Banks Credits are Mainly Short-Term Public Offering is The Only Financing Source of Capital Markets

3. 3 Private Equity Investments in Turkey (2003-2007) Source: Mergermarket, as of 6 June 2008 26.6%*6.9%3.2%0.2%2.1%7.2%7.2% PE’s Share in M&A Market Industry is growing despite unfavourable market conditions TURKISH PE INDUSTRY GROWTH Number of Exits 2 2 2 3

4. 4 4 Office in Turkey with a dedicated fund Opportunistic / Regional with an office in Turkey Does not have an office in Turkey  Bubble size indicates the number of deals done by the fund Only 5 years ago, number of active players in Turkish PE market was limited to 5 TURKISH PE INDUSTRY GROWTH – Market Position of PE Funds 2002

5. 5 5 Turkish private equity market is increasingly attracting significant attention (*) Not drawn to exact scale Office in Turkey with a dedicated fund Opportunistic / Regional with an office in Turkey Does not have an office in Turkey  Bubble size indicates the number of deals done by the fund TURKISH PE INDUSTRY GROWTH – Market Position of PE Funds 2008

6. 6 6 PE FundNumber of Deals% in total 1.Is Private Equity1023% 2.Turkven716%16% 3.Citi Venture Capital International (“CVCI”)37%7% 4.Kobi Private Equity37%7% Remaining3244% TOTAL43100% PE Funds’ Activity – Total Number of Deals (2003-2007) PE Funds’ Activity – Total Deal Volume (2003-2007) TOTAL7,300100% Is Private Equity is the market leader in terms of number of deals whereas BC Partners has made the largest investment in Turkish market history. * Excluding transactions completed by consortiums with strategic players, including leverage TURKISH PE INDUSTRY GROWTH – Most Active Players PE Fund * Deal Volume (000 US$) % in total 1.Moonlight Capital (BC Partners&Turkven)1,67523%23% 2.Kohlberg Kravis Roberts (“KKR”)1,25217% 3.Texas Pacific Group (“TPG”)81011% Remaining3,56349%

7. 7 7 TURKISH PE INDUSTRY GROWTH – Transactions in 2007 Entrance of big players increased size and changed the type of deals

8. 8 14 Feb 2008Migros Turk T.A.Ş.RetailMoonlight Capital1,67550.83 3 Sep 2007UN Ro-RoLogistics Kohlberg Kravis Roberts & Co. 1,24087.90 13 Apr 2006Mey Icki Sanayi ve Tic. A.S.ConsumerTexas Pacific Group81090.00 12 Jan 2008Acıbadem Sağlık HizmetleriHealthcareAbraaj Capital44334.32 26 Mar 2008Başkent DoğalgazEnergyABN AMRO Capital 35822.23 25 Dec 2006TAV Havalimanlari Hold.A.S. Airport Babcock And Brown Inc ; Goldman Sachs 31521.00 31 Oct 2005DigiturkMediaProvidence Equity Partners25647.00 28 Nov 2006Biofarma PharmaceuticalsPharmaCitibank Venture Capital200100.00 26 May 2006Deva HoldingPharmaGEM Global Equities Man.16247.39 2 May 2007BeymenRetail Citigroup Venture Capital International 14350.00 Source: Mergermarket Date TargetSector Buyer Size ($mn) Stake (%) TURKISH PE INDUSTRY GROWTH– Top 10 Deals

9. 9 INDUSTRY EXIT OPTIONS INVESTMENT SIZE EXPECTED RETURN PARTNERSHIP STRUCTURE TRENDS IN THE MARKETS

10. 10 TRENDS IN THE MARKET – Industry 1995 – 2004 2005 – 2008 Source: Private Equity Report in Turkey,2007 Investments have been focused on mainly consumer goods, services and health industries

11. 112003 20052007 2008 Thanks to newcomers, ticket sizes are growing. TRENDS IN THE MARKET – Investment Size

12. 12 1995 – 2005 2006 – 2008 TRENDS IN THE MARKET– Partnership Structure Majority investments become more popular Source: Private Equity Report in Turkey,2007

13. 13 Private Equity investments in Turkey generally seek for 15-25% returns on USD terms TRENDS IN THE MARKET – Expected Returns InvestmentDuration Invt. (mn$) Return (%)   EBITDA multiples are around 5-8.   During the last a few years, PE funds decreased their IRR expectation. Examples 19,72%*3,54 yearsStep Halı 45,75%26,014 monthsTüyap 30,25%11,53 yearsCinemars 64,64%*4,019 months Beyaz Fleet Leasing * Beyaz Fleet Leasing and Step Halı returns have been calculated from ISE data.

14. 14 TRENDS IN THE MARKET – Exit Options Public Offering Strategic Sale Financial Sale Management / Owner Buyout All exit options are available in the market

15. 15   As a result of recent global economic developments, financing cost is increasing. FINANCING NEWCOMERS TRANSACTION VOLUME EXPECTED RETURN   Despite market conditions, new funds are coming   Ticket sizes will remain high.   An internal rate of return will be around 15%-25%. EXPECTATIONS EXITS   Because of market conditions, exit will be harder than before.

16. 16   Accessing Proprietary Deal Flow   Foreign funds’ need to utilize intermediaries to generate deal flow  creates an “auction” environment, high competition resulting in increase in entry prices   Deal Structuring   PE funds’ requirement for risk control mechanisms (exit priorities, drag-along, tag-along rights) and capital protection clauses (dividend privileges, minimum return guarantees) not well understood by founding shareholders   Determining Past Performance of Companies – Due Diligence   Macroeconomic history of high inflation, fluctuating FX rates and volatility   Lack of accounting and IT infrastructure   Business Culture, Corporate Governance and Transparency   Family owned companies reluctant to have an outside shareholder   Complicated shareholding structures, hard to identify “related-parties”   Management Recruiting and Retaining   Scarcity of result-oriented management talent that can deliver PE expectations   Management backgrounds relatively difficult to reference LOCAL CHALLENGES TO CONSIDER

17. 17 İŞ Kuleleri Kule-2 Kat:12 4. Levent 34330 İstanbul Turkey Tel: (+90212) 350 20 00 Fax: (+90212) 350 20 01 Fenerbahçe, Fener Kalamış Cad. Tibaş-Belvü Sitesi A2 Blok Daire:3 Kadıköy 34726 İstanbul Turkey Tel: (+90216) 542 72 00 Fax: (+90216) 542 72 01 HEAD OFFICE KALAMIŞ BRANCH ANKARA BRANCH Tahran Cad. No:3/8 Kavaklıdere 06700 Ankara Turkey Tel: (+90312) 455 26 50 Fax: (+90312) 466 26 62 İZMİR BRANCH Akdeniz Cad. No:14 Birsel İş Merkezi Daire:501 Alsancak 35210 İzmir Turkey Tel: (+90232) 488 90 00 Fax: (+90232) 488 90 01 Jeltozbekova Street 97 Block A2 Floor:2 Almaata 050051 Kazakhstan Tel: (+7727) 334 05 08 Fax: (+7727) 334 05 09 ALMA ATA REPRESENTATIVE OFFICE MAXIS SECURITIES LTD. 8 Princes Street London EC2R 8HL U.K. Tel: (+44207) 397 1431 Fax: (+44207) 726 2566 SUBSIDIARY Köybaşı Caddesi İskele Çıkmazı No:277 Yeniköy 34464 İstanbul Turkey Tel: (+90212) 363 01 00 Fax: (+90212) 363 01 01 YENİKÖY BRANCH www.isyatirim.com.tr www.isinvestment.com Süleyman Seba Cad. No:44 B1 Blok Daire:10 Akaretler 34357 İstanbul Turkey Tel: (+90212) 326 87 00 Fax: (+90212) 326 87 01 AKARETLER BRANCH Havalimanı Kavşağı EGS Business Park B3 Blok No:470 Yeşilköy 34149 İstanbul Turkey Tel: (+90212) 463 20 00 Fax: (+90212) 463 20 01 YEŞİLKÖY BRANCH Yapı Kredi Plaza C Blok K:9 Bölüm 25/B 4. Levent 34330 İstanbul Turkey Tel: (+90212) 282 00 18 Fax: (+90212) 282 00 19 İSTANBUL REPRESENTATIVE OFFICE IS INVESTMENT

18. 18 Turkish PE industry promises a significant growth potential with 7% weight of PE deals in total deal volume compared to global figure of 45%. 18 Sounce: Mergermarket, Dealwatch TURKISH vs. GLOBAL PE INDUSTRY – Share in Total Deal Volume* Global PE Activity Turkish PE Activity