The dawn of private equity in Turkey has been heralded time and time again since the first wave of investors such as Nomura Sparx Group and Merrill Lynch Investments entered the market in 1995. But when the private investment arm of the C$100 billion
Since the start of the EU accession negotiations on December 17, 2004, Turkey has seen approximately US$30 billion in foreign direct investment pour into the country and Turkish companies are more open to private equity now than ever before. Lots of international institutions are convinced that they want a lead role in latest instalment of the Turkish private equity saga. Jim Leech, senior Vice-President of Teachers’ Private Capital thinks Turkey is an attractive private equity market with a large number of mid-market businesses, and a developing economy which is expected to benefit from its increasing closeness with the European Union. Despite the early success of the Actera Fund and the increase in FDI will this be yet another false start for Turkish private equity?
Oney says: “Although Turkey has an up-and-down history of private equity investments, the scene still remains unclear as far as the success and adoption of the private equity investment philosophy and such partnerships is concerned.” But now that the presidential and parliamentary elections are finished Oney expects to see over US$2 billion in private equity funds committed to investing in Turkish companies beyond 2007. Antika says: “The elections are over and the sitting administration will be in power for the next five years providing stability to the country. The positive sentiment towards Turkey will help drive deal flow. I expect to see global players in private equity entering the market and efforts made by homegrown funds.”
The number of Turkish investors using a private equity investment style is set to increase, according to Deloitte. Turkish entrepreneurs, who have accumulated assets after selling shares in their companies in the past couple of years, are planning to invest in a private equity style. Also, an increase in the initiatives from Turkish intellectuals and qualified young professionals to raise funds and make considerable investments is also expected, according to Oney.
Private equity players that used to be interested in the BRIC countries are now seemingly looking to the TRIC countries with Turkey replacing Brazil as a fast growing economy. But will all this excitement and investment find a proper home in Turkey? Or are we witnessing the latest wave in the in-and-out play that has plagued Turkish private equity for the last dozen years?