August 8, 2014 / 5:26 PM / 3 years ago

Fitch Affirms Yapi Kredi Invest's Koc Group Affiliates Equity Fund at 'Strong'

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: Yapi Kredi Invest's Koc Group Affiliates Equity here PARIS, August 08 (Fitch) Fitch Ratings has affirmed Yapi Kredi Invest's Koc Group Affiliates Equity Fund's 'Strong' Fund Quality Rating. The fund is managed by Yapi Kredi Portfoy. KEY RATING DRIVERS The 'Strong' rating reflects the fund's disciplined, research-driven approach in managing listed affiliates of the Koc Group, a large Turkish industrial conglomerate. The rating is also supported by the depth of Yapi Kredi Portfoy's dedicated investment resources as well as by its solid expertise and depth of experience in the domestic market. FUND PRESENTATION The fund is a Turkish domiciled, regulated open-ended fund with TRY125m of assets, as of end-June 2014. It invests mostly in listed affiliates of the Koc Group, a large Turkish industrial conglomerate. Equity exposure may vary between 75% and 100%. The fund's limited investment universe, the resulting industrial sector bias and constraints to active allocation differentiates its market and risk profiles from most of its peers. INVESTMENT PROCESS The fund combines a flexible top-down equity allocation with bottom-up stock selection, supported by proprietary research. Investment decisions are taken at a weekly committee that sets allocation bands and determines active stock selection. The fund manager's principal shareholder is Koc Financial Services, a joint strategic partnership between UniCredit S.p.A. and Koc Holding of Turkey, a diversified Turkish industrial conglomerate, majority-owned by the Koc family. Possible conflicts of interest are closely monitored by the regulator and internal and external audits. No conflicts of interest have been reported in the fund's 16-year history. RESOURCES The fund is managed in a consensual manner and benefits from the depth of Yapi Kredi Portfoy's investment and support functions. The lead portfolio manager (PM) is Head of Yapi Kredi Portfoy's equity department with more than 20 years of investment management and research experience and has been managing the fund since June 2010. The co-manager has 12 years of industry experience. Yapi Kredi Portfoy's IT platform is overall robust and matches the requirements of the funds. TRACK RECORD Historically, the fund has performed well against its benchmark, which was amended in January 2012 to: 90% Reuters Koc Company Index, 5% KYD-182 Bond Index, 5% KYD O/N Repo Index, The fund's specific benchmark and industrial bias makes comparison with peers in the same category difficult. Nevertheless, the fund outperformed the Lipper category "Turkish equities" over three and five years. FUND MANAGER Yapi Kredi Portfoy (Asset Manager Rating 'Highest Standards (tur)'), part of the Koc Group, was established in 2002. It is one of Turkey's leading asset managers with TRY10.7bn assets under management, including 7.7% in equities as of end-December 2013. RATING SENSITIVITIES The rating may be sensitive to material changes in the investment or operational processes or resources dedicated to the fund. A material adverse deviation from Fitch's guidelines for any key rating driver could result in a downgrade. For example, this may be manifested in significant structural deterioration in the fund's performance or excessive risk taking. More specifically, evidence of a conflict of interest with respect to Koc group companies or failure to operate at arm's length may result in a downgrade or rating withdrawal. Fitch sees limited key person dependency given the depth of the investment team. Fitch sees little potential for an upgrade, given the specific nature of the fund and its benchmark. Fitch's Fund Quality Ratings combine Fitch's experience in qualitative fund analysis with rankings and performance data from Lipper, a Thomson Reuters company. Fitch's Fund Quality Ratings offer an independent, forward-looking assessment of a fund's key performance and risk attributes and consistency of longer-term returns, relative to peer group or benchmarks. The ratings focus on the fund manager's investment process, key fund performance drivers, risk management, and the quality of the fund's operational infrastructure. For more information, please see www.fundmanagement.fitchratings.com To receive forthcoming Fund Quality Rating research, opt in here Contacts: Primary Analyst Manuel Arrive, CFA Senior Director +33 1 44 29 91 77 Fitch France S.A.S. 60 rue de Monceau Paris 75008 Secondary Analyst Richard Woodrow, CFA Associate Director +44 203 530 1388 Committee Chairman Alastair Sewell Senior Director +44 203 530 1147 Media Relations: Elaine Bailey, London, Tel: +44 203 530 1153, Email: elaine.bailey@fitchratings.com. Additional information is available at www.fitchratings.com. Applicable criteria, 'Fund Quality Ratings Criteria', dated 19 September 2011, are available at www.fitchratings.com. Applicable Criteria and Related Research: Fund Quality Ratings Criteria: Assessing Funds’ Investment Processes and Operational Attributes here Yapi Kredi Portfoy Yonetimi A.S. here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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