Cross Border Transactions
The amount of foreign direct investments entering Turkey and emerging markets has surged since the beginning of 2005. The numbers in Turkey have reached over 200 billion USD since then. These investments have occurred in the form of foreign companies and/or private equity investors partnering with or acquiring majority or minority stakes in private or state owned companies. Majority of foreign capital entering Turkey and emerging markets via M&A enters from the UK, EU followed by the US, the Middle East, Russia and lately Asia.
There is no doubt that more and more foreign companies and financial investors are viewing Turkey as one of the ultimate high growth frontiers and are becoming interested in investing in Turkey. We expect between 10-15 billion USD per annum to enter going forward, again mostly via M&A. We expect the amount that would enter emerging markets in general would be multiple times higher than this figure.
Turkey and emerging markets have become more resilient to cope with uncertainties.
However, all investments, small or big, need to be diligently and carefully handled knowing the challenges that exist. The process, although same everywhere in theory, has many local aspects arising from differences in business cultures and the environment that investors need to be aware of. This awareness level and know-how can greatly be improved by assigning the right combination of experts at the boards of the investee companies, where at least one of them either as a member or as a rep needs to be a well experienced Turkish professional who knows the global and local aspects of the full investment and the operations value chain. Not only starting from a post investment period, but assigning the right expert starting from due diligence coordination and/or drafting of transaction documents makes a huge difference in making the partnership a success.