Two-thirds of Turkish private equity investors expect a continued deterioration in the economic climate over the next six months, according to Deloitte’s fourth Turkey Private Equity Confidence Survey, up from 55% in the first half of 2008.
Views were split on transaction volumes, with 25% expecting an increase, 25% a decrease and 50% predicting no change, although this was more optimistic than the previous survey, where 45% expected a decline. As before, the majority (58%) believe there will be increasingly less debt available – just 5% foresee an uptick – and 67% expect to see declining entry multiples, up from 45% previously. Similarly, 58% believe raising funds will become increasingly difficult.
However, there was increased optimism regarding portfolio companies, with 33% expecting an improvement, compared to 25% forecasting a decline. Less than 10% expected an improvement at the end of the first quarter. Going back to before Q3 2007, as the credit crunch first emerged, no respondents expected a decline.
The largest private equity deals in the country in 2008 to date include London-headquartered BC Partners and Turkish private equity house Turkven’s US$1.7bn purchase of supermarket chain Migros and Dubai-based Abraaj Capital’s US$587m acquisition of healthcare group Acibadem saglik Hizmetleri.