Garanti Asset Management

YTL 4.7 billion total asset management

In 2008, Garanti Asset Management managed 16 mutual funds of GarantiBank, 3 mutual funds of Garanti Securities, 10 pension funds of Garanti Pension and Life, and the portfolio of Garanti Investment Trust listed on the ISE.

As of 31.12.2008, the assets under Garanti Asset Management's management totaled YTL 4.7 billion.

Growing market share in mutual funds in a variable year

After having experienced steady growth for several years in a row, the mutual funds market suffered from the global financial crisis that has taken place towards mid-2007 and experienced deeper levels in 2008. The aggregate volume of mutual funds, under Garanti Asset Management's management, lost about a part of its value, declining from YTL 3.7 billion in 2007 to YTL 3.5 billion in 2008, when the total market size decreased from YTL 26 billion to YTL 24 billion during the same period.

Yet, Garanti Asset Management strengthened its market position and increased its market share from 14.22% at the end of 2007 to 14.63% as of 31.12.2008.

Rapid growth in pension funds

Pension funds are one of the fastest-growing investment products that have been offered in Turkey today.

The strong growth in the sector increases the importance of pension funds from the standpoint of market share. The share of pension funds, in total assets under management, continues to rise day by day and in the near future, this business line will be in a position to serve as a financial leverage for the Turkish economy as a whole.

Garanti Asset Management works closely with its sister company, Garanti Pension and Life (GP). During 2008, Garanti Asset Management provided GP with management services for 10 different types of pension funds. In 2008, the total volume of assets under management in this segment increased from YTL 562 million in 2007 to YTL 879 million in 2008, which corresponds to a market share of 13.77% as of 31.12.2008.

Discretionary Portfolio Management

The global financial crisis has shown its effect on discretionary portfolio management, just like it did for other business lines. The liquidity problems led to portfolio outflows in the sector. The discretionary portfolio management market totaled about YTL 2.2 billion and the volume of Garanti Asset Management in this segment reached YTL 296 million with a 13.49% market share as of end of 2008, according to the Capital Markets Board data.

Garanti Asset Management believes that it will benefit,preferentially, from the difficult market conditions due to its advantage of being a pioneer in the asset management sector and the competitive and high quality service understanding of Garanti Bank.

Alternative Investments Management

In 2008, Alternative Investments Department began to manage 2 new funds, the Principal Protected Fund and %10 Interest and Principal Guaranteed Fund. On the other hand, the Capital Markets Board of Turkey has approved the Hedge Fund's prospectus in the middle of the year and is expected to issue this immediately after the Board's approval.

Risk management

Garanti Asset Management has effective risk control mechanisms that encompass all phases of its investment processes.

Under the heading of Pre-Defined Risk Control mechanisms, the expected returns and maximum sustainable losses for all investment instruments are continuously monitored by the Company.

Auditing

Garanti Asset Management is one of the most highly respected and trusted companies in its sector. The reputation the Company has earned is, among others, attributable to its effective internal audit system.

2008 Activities

The main advantage of Garanti Asset Management over its competitors is its proactive business strategy and the synergetic and effective collaboration that the Company has developed within Garanti Bank and its branches, which act as the main delivery channel of Garanti Asset Management. Garanti Asset Management is also unique in that it is the only asset management company with an internal research department.

In order to further increase the synergy between the 2 companies, the branches of Garanti Bank, has been provided with training activities and visits pertaining to available asset management products in 2008. The informative visits and training programs allow these products to be marketed more actively and consciously.

Alternative Investments Department organized 4 introduction and information meetings in Istanbul, Ankara and Izmir for the introduction of a Hedge Fund, targeting the qualified investors.

Future Plan and the 2009 Target

Garanti Asset Management will remain the first choice of customers in 2009, displaying a performance compatible with the Garanti brand. In this context, the Company aims to increase its market share and solidify its position by using efficient delivery channels and launching new products.

Garanti Asset Management's objective is to become an Asset Management company that obtains the highest benefit from the huge business potential that exists in Turkey, in the ongoing process of its institutionalization.

As an affiliate of Garanti Bank and a member of Doğuş Group, Garanti Asset Management is set to achieve that objective mainly due to its own human resources, as well as corporate culture and business philosophy.