ALTASSETS - Turkish PE Market Is Unscathed by Military Coup, Says Globalturk Founder
The Turkish private equity market has been unaffected by the country’s recent military coup according to Globalturk Capital’s founder and managing partner Baris Oney.
On the 15th of July the country and its people were attacked by an organized group of an army personnel who went rogue. Thankfully, the coup failed; however, the movement had the potential to damage the economy and, in turn, the country’s rising private equity market.
Oney told AltAssets, “It did not have any negative impact on the private equity market and strategic investments.”
Just last week, emerging markets private equity giant The Abraaj Group raised a $526m fund to invest in Turkey.
Around 70 per cent of the capital came from European and North American investors, with institutional investors and sovereign wealth funds accounting for 78 per cent.
Oney added a first time fund focused on the country has already closed a $105m fund last week and a well-established buyout house is in the process of finalizing its closing, demonstrating the resilience of the market.
“IFIs and private investors are both continuing to invest in these funds and directly. On the infrastructure investments like renewable energy for example, IFIs and local banks are providing 10+ years project finance, some being non-recourse even after the coup attempt.”
Two major multinational industrial companies from France and the US have also decided to issue letter of intents to acquire shares in Turkish companies according to Oney.
“Of course PE managers are assessing the impact on their portfolio investments and spending time on that front also. But this is very normal. In general, I can confidently say things are back to normal.
“We are in summer months where most of the business activity slows down in general. Therefore, it is quite early to assess the appetite of the LPs.
“However, looking at the recent closings, I do not see any change in their strategies about Turkey. There is no political volatility in the country to be honest. We just had a major terrorist attack on our nation but we recovered almost instantly.”
With the same government still in power, and more importantly the country is united now more than ever, the country’s private equity market is moving ahead like normal according to Oney.
He said, “No slowdown on any state run mega infrastructure projects, no observation on any Turkish or foreign company decisions to slowing down their operations or investments. Many however, are assessing their situations and cautiously monitoring the events but no slowing down.
“I don’t think this incident will have a major impact on valuations. Good deals will continue to be made whatever the valuations were before the coup attempt.”