What Is a Venture Capital Investment Fund (GSYF)?

A venture capital investment fund (girişim sermayesi yatırım fonu, GSYF) is a fixed-term, legal-personality-free pool of assets set up with money collected from qualified investors to invest, on the unitholders' behalf, in venture companies. The framework that governs it is the SPK's Venture Capital Investment Funds Regulation (Tebliğ III-52.4), issued under Articles 52 and 54 of Capital Markets Law No. 6362. Under the regulation, the fund's principal activity is to run a portfolio made up of venture capital investments. A GSYF is a type of investment fund, but unlike an ordinary TEFAS fund it is not open to everyone.

Portfolio: stakes in and financing for venture companies

Article 19 of the regulation requires at least 80% of the fund's total value to consist of one or more venture capital investments. However, where the fund's direct investments in SME-qualifying venture companies exceed 10% of total fund value in an accounting period, the limit applies as 51%. Under Article 18, a venture capital investment mainly takes these forms:

• Becoming a shareholder in — or a founder of — venture companies through capital transfer or share transfer,
• Investing in the debt instruments or lease certificates issued by venture companies whose shares are not exchange-traded,
• Investing in the units of other venture capital investment funds, or in instruments issued by venture capital investment partnerships.

A venture company (Article 18) is an entity with growth and value-creation potential, in the form of a joint-stock or limited company, established in Türkiye or whose assets mostly consist of Turkish subsidiaries and affiliates. A GSYF therefore provides equity and financing to early- or growth-stage companies rather than to liquid, exchange-traded securities, and mechanically it is a completely different instrument from a stock fund or a money market fund.

GSYF versus GSYO

The legal shells differ. A GSYF is a fund: it has no legal personality, it is a fixed-term pool of assets, and it issues participation units. A GSYO (girişim sermayesi yatırım ortaklığı, a venture capital investment partnership) is a company: it is a joint-stock company with legal personality, it issues shares, and it is governed by its own regulation (III-48.3). A partnership's shares can trade on the exchange, whereas a fund's units are book-entry and transferable only among qualified investors.

Qualified investors, long horizon and low liquidity

Article 13 is explicit: units may be sold only to qualified investors. A qualified investor is one who meets the financial-means, knowledge and experience criteria defined in SPK regulation, and the status must be documented. This puts a GSYF in the same access category as hedge (serbest) funds — it is not offered to the general public.

By design a GSYF is long-horizon and low in liquidity. Because exiting an investment in a venture company can take years, in most funds units cannot be redeemed before the end of the fund's term; the redemption terms are defined in the fund's issuance agreement. The founder may postpone redemptions for up to a year when the necessary liquidity cannot be provided.

Valuation: appraisal, not a market price

Unlike a daily-priced fund, the venture investments in a GSYF's portfolio have no exchange price. Article 20 requires their value to be determined at least at the end of each accounting period, based on appraisal reports prepared to the Board's standards. Under Article 20/2-b, in funds not based on a capital commitment a report from an appraisal firm approved by the Board is mandatory for every venture company investment at any size; size only sets that report's frequency: below TRY 25 million at the end of every third accounting period, between TRY 25 and 50 million every second, and above TRY 50 million every accounting period. In commitment-based funds where units cannot be redeemed before the term ends (Article 20/2-a), the value may instead be set by a founder board resolution resting on a fund investment committee report prepared to the Board's valuation standards. The fund's unit value must also be calculated at least once a year (Article 15).

The practical consequence: a GSYF's return series does not fluctuate daily like a liquid fund's. It is updated step by step through periodic appraisals, so a GSYF's past return should not be read with the same eye as a daily-priced fund's.

Tax: the corporate-tax exemption

Article 5/1-a of the Corporate Tax Law (No. 5520) exempts from corporate tax the dividends that fully liable corporations earn from fully liable venture capital investment fund units, the income arising from redeeming those units to the fund. Article 5/1-d additionally exempts the fund's own earnings (at the fund level). The exemption applies to fully liable corporations; individual investors are subject to a different tax regime.

This is general information, not tax advice. How the exemption applies to a given investor's own situation is specific to that person; for a binding assessment consult a certified public accountant (mali müşavir) or request a private ruling (özelge) from the Revenue Administration. A GSYF's unit terms and any withholding rules are set out in the fund's information documents. This page recommends neither buying, selling nor holding any fund; it only explains what the instrument is and what the regulation says. You can see this site's list of venture-capital-themed funds on the /fonlar/girisim-sermayesi-fonlari page.