Mesut Ellialtioglu of Talas Turkey Value Fund presented his in-depth investment thesis on Borusan Investment (Turkey: BRYAT) at Best Ideas 2020.

Thesis summary:

Borusan Investment is a diversified investment conglomerate based in Istanbul, Turkey. BRYAT holds investments in the Borusan Group companies. It is active in construction machinery (Caterpillar) and luxury auto distribution (BMW, Land Rover, Jaguar), port operations and logistics, and galvanized steel and steel pipes production.

Borusan Group is the exclusive distributor and service provider for Caterpillar in Turkey, Kazakhstan, Azerbaijan, Kyrgyzstan, and the Russia / Far East regions, with Caterpillar sales and service revenue of $850 million. The Group is also the single largest exclusive BMW distributor in the world, with annual sales of ~25,000 cars. In port operations and logistics, Borusan Gemlik Port is a major port used for handling vehicle exports and imports in Turkey. Borusan Mannesmann is Turkey’s leading spiral welded pipe manufacturer.

BRYAT’s market capitalization recently stood at $230 million. The company had a net cash position of $80 million at the end of Q3 2019. The shares recently traded at a ~60% discount to Mesut’s estimated NAV of $600 million.

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About the instructor:

Mesut Ellialtioglu, the Fund’s Turkey Investment Officer, has 23 years of Turkey focused equity research and fund management experience and focuses on value investing opportunities in the Turkish equity market. Prior to forming Talas Capital with Mr. Matthew Peterson, Mr. Ellialtioglu worked with Bankers Trust Company as an associate, Korfez Securities (Garanti Bank) as Co-Head of Research, UB Ulusal Securities (formerly SAMBA Saudi American Bank) as Managing Director for research and asset management, Kent Securities as Head of Asset Management, and ABN AMRO Asset Management Turkey as Chief Investment Officer. Mr. Ellialtioglu graduated with BS in Economics degree from the Wharton School of Business of the University of Pennsylvania in 1993.