Political instability in Turkey, at both the international and domestic level, combined with a decline in value of the Turkish Lira, is creating a difficult climate for private equity fund managers to successfully raise and invest capital. Preqin’s Fund Manager Profiles online service shows that there are currently 24 active private equity firms based in Turkey; these firms have collectively raised $3.7bn over the last 10 years and currently have an estimated $682mn in dry powder. Sixty-seven percent of Turkey-based firms currently target solely Turkish investment opportunities, highlighting that the majority of firms operate on a smaller scale, investing domestically while the market continues to mature.
Actera Group is Turkey’s largest private equity firm based on funds raised in the last 10 years. The independent firm has accumulated just under $1.8bn in capital commitments and invests across a diverse range of industries in Turkey. Actera Group seeks to partner with both established and emerging companies and utilizes a combination of growth and buyout strategies. Ranked by the same criteria, the above table shows that Turkven Private Equity, Mediterra Capital, TIMAR Ventures and Ünlü Private Equity follow Actera Group in rounding off the largest firms in Turkey. Together, these firms have raised a disproportionate 94% of all raised capital in the country over the last 10 years. In terms of strategy preferences, half of all Turkey-based firms employ a buyout strategy as part of their overall investment plan.
Looking forward, Turkey-based fund managers still face an uncertain future as the private equity industry continues to be overshadowed by political developments. In Turkey’s November election, the AKP won an outright majority; it remains to be seen if this post-election period will bring about increased stability and thus a more prosperous financial environment. As Turkey is a crucial player in CEE-based private equity, the region as a whole may benefit if investor confidence returns to the country.