How Can Private Equity Funds Flourish in Turkey?

Private Equity Funds fill an important gap in Turkey. There are around 20 Private Equity Fund Managers who have operating bases in Turkey and an additional 40 plus, who explore investment opportunities and invest from abroad.

Private Equity Funds are currently investing in companies with a ticket size of USD 15-20 million and above. With this type of investment philosophy, only big companies are potential targets. Maximum 2000 large companies lie within this pool in Turkey. Turkey needs private equity money, which could invest below USD 10-15 million. But there is very limited number of Funds, who could possibly invest below this amount.

Sizable companies in Turkey have hesitations on engaging themselves and partnering with Private Equity Funds, because these Funds exit from investments in 3 to 7 years. This is typically an Anglo-Saxon style investing: Invest in it, grow it and sell it, invest in a new one. Turkish large companies need to adapt to this mentality prior to partnering with Private Equity Funds and if they will, then they could grow with them.