What is the form of the organizational and administrative structure of real estate funds in Turkey?

Real estate investment funds consist of a management team that manages the fund and guides it towards successful investment, and the tasks of the fund are distributed among a number of departments and individuals responsible for them, whose combined efforts complete the management structure of the fund.

Through the following lines, interested parties can get a picture of the basic administrative and organizational structure of real estate funds in Turkey, and the main tasks assigned to each of them.

1. The institution that manages the fund (Fonun kurucusu)

A real estate fund is established and managed by companies licensed by the Securities Commission, which manage stock, currency or property funds on behalf of clients participating in the fund who seek to achieve the best return on their investments.

The founder of the fund is responsible for representing, managing and supervising the fund in order to protect the rights of its shareholders, and has the duty to carry out investment activities in accordance with the provisions, bylaws and regulations, and the founder of the fund may dispose of its assets in his name and on behalf of the fund, in accordance with the legislation, bylaws and the issuance document, and exercise the rights arising therefrom.

The founder may also obtain portfolio management services from another real estate portfolio management company and sign contracts, all at his full responsibility.

In cases where there is no provision in the law and is not covered by the relevant legislation, bylaws and document regarding the relations between the founder and unit owners, the provisions of Articles 502 to 514 of the Turkish Code of Obligations No. 6098 dated 1/11/2011 shall be applied by analogy.

2. Portfolio Custodians (Portföy Saklama Kuruluşları)

Portfolio custodians are a neutral third party responsible for preserving the fund’s assets, such as cash, i.e. storing the financial assets of collective investment institutions. This party also maintains records and verifies investments, tracks the ownership of other assets, monitors the execution of transactions related to the assets and the movement of cash, and fulfills other duties. Specified in the fund statement, this service is provided by licensed banks and intermediary institutions.

The duties of the portfolio custodian also include ensuring that the assets belonging to collective investment companies are stored separately and in a way that clearly indicates that they belong to a collective investment organization, which guarantees investors that their capital will not be lost or damaged, which enhances the safety of investing in them, while monitoring the assets and rights and their movement on a regular basis.

Portfolio custodians also perform the function of reconciling the assets held on a daily basis in coordination with the institutions that provide central custody services for these assets and the portfolio management company or the investment fund, and the portfolio custodians issue periodic reports to investors on the status of the fund's assets.

Custodians are also required to develop and implement policies to ensure management, supervision, and disclosure of conflicts of interest that may arise during the execution of the custody service.

3. Investment Advisor (Yatırım danışmanı)

It is responsible for advising the managing organization of real estate funds on all matters related to investment strategies and real estate selection, and the investment advisor may work independently or be affiliated with an organization specialized in this field.

4. Legal Review and Audit

Legal review and audit are carried out by independent legal and accounting professionals whose function is to ensure that the Fund complies with laws, regulations and accounting standards. One of the most important roles of the statutory auditor is to issue reports on the validity of the Fund's financial statements and the cleanliness of its financial and administrative records.

5. The Fund's Board of Directors

It is the team that oversees the work of the company that founds and manages the investment fund, and its roles include making sound decisions for the benefit of investors, developing strategic plans, providing performance reports, and expertly dealing with risks. The board of directors of a real estate fund usually consists of independent members, with experience in the fields of general investment and the real estate sector, and with a good reputation in this field.

6. Investors (Yatırımcılar)

We mean the owners of invested capital, who own shares (units) in the real estate fund according to their financial participation in it, and receive profits from the fund according to their shares periodically. Investors have the right to participate in the general assembly meetings of the fund's investors and vote on its important decisions.

7. Investment Committee (Yatırım Komitesi)

The Investment Committee is the body formed by the Fund's Board of Directors to provide investment advice to the Board of Directors on investment strategies and real estate selection. The investment committee should consist of a number of members with experience in the real estate investment sector and knowledge of the target markets.

8. Reporting and compliance

These are the periodic reports issued by the management company of a real estate investment fund, which are mainly intended for investors participating in the funds, in addition to general reports on the fund's performance and risks. These reports act as a guide for the fund management, as the fund management must comply with the results of the reports in accordance with specific laws and regulations, including the reports issued by the Turkish Capital Markets Authority.

9. Legislation and supervision

These are the determinants that regulate investment and real estate funds:

Turkish Capital Markets Authority (CMB)

REITs in Turkey are regulated and supervised by the Capital Markets Board of Turkey (CMB), the regulatory and supervisory body responsible for Turkey's securities markets, under the Capital Markets Law of 1981.

Relevant laws

The Capital Markets Authority (CMA) develops detailed regulations to regulate markets and develop capital market tools and institutions and investment funds, and issues rules, laws and regulations to ensure the proper functioning of investment funds and protect the rights of investors.

For all things related to investment funds in Turkey, consult Oragon

Oragon Portfolio Management is a company that has been licensed by the Turkish Capital Markets Board to establish real estate investment funds since 2018, and works as a founder and manager of real estate investment funds and venture capital funds, seeking to provide an ambitious and advanced investment model in various investment sectors, and Oragon works to enhance the profits of its investors through strategic planning to grow their savings, diversify their investment portfolios, and move forward to achieve the best investment returns.

In 2023, Oragun was able to expand its activities by being licensed as an originator and manager of venture capital portfolios.

Today, Oragun operates under the supervision of a management team that includes some of the most prominent names in the real estate sector and in the Turkish stock markets.

Oragon makes its investment funds available to ambitious investors who want to grow their savings, by developing strategic plans to grow their capital in its funds, diversify their investment portfolios, and achieve the highest possible investment return, taking into account the investment risks according to clear and studied investment principles.

In addition to our services in the field of establishing private investment funds for investors wishing to embark on their new investment experiences with a special investment vision, with the possibility of obtaining licenses and official approvals, in addition to our free advisory services on everything related to investment in investment funds in Turkey.

Edited by Oragon Company ©