Barış Öney
For PE Funds to continue their investments in Turkey, much depends on their successful exits from around 150 companies between 2015-2017, which the funds have made their investments into these companies some more than 4 years ago.
Private Equity Funds exited from around 20% of 200 investments to date, which were invested between 2005 and 2014.
These companies, which operate in sectors like industry, services, FMCG, healthcare, informatics, media, advertisement and financial services, need to be closely monitored since successful exits from these companies and sectors are expected to drive new investments to Turkey. But if the exits are unsuccessful, it won’t be easy to prevent the outflow of investments from Turkey to other countries.
It is imperative to work with expert advisers/partners in this area for successful exits
For successful exits, the company owners should work with fund managers who invested in their companies and most importantly work with expert advisors/partners which are specialized in exits from investments.
Exit advisory is not a normal corporate finance service like a standard M&A sell side advisory. The reason for this is that the adviser should not only take into consideration the issues between the sellers and buyers, but also the smooth exit process between the existing shareholders. Such negotiations, if not managed properly, could cause major problems during the exit process. There are very few advisers, who are specialized in this field in Turkey. To manage the process successfully, advisers need to be included into Board of Director meetings 1.5-2 years before the exit and earn the trust of the shareholders and investors.
An investor who won’t be able to receive the expected return from its investment may not invest in Turkey again
Private Equity Fund Managers, who invest in Turkey, raise their funds either from foreign funds or from retirement funds and all the countries in the world are in competition with each other to attract these funds. It will be really hard to attract the much needed funds to invest to Turkey again if the Private Equity Funds who invested companies in Turkey won’t be able to achieve their expected return from their investments.
Turkey could be the first choice of Private Equity Funds after USA and Africa
If the correct steps are taken, huge advantages could be seized. Even though most of the emerging markets are shrinking, Turkey is still expected to grow around 3.5-4 percent annually. There are serious opportunities which companies present to investors. Even if there are different opinions on Turkey, as of now, Turkey is still the one of the first choices of Private Equity Funds after USA and Africa. We should enhance macro-economic environment and make outstanding exits to preserve and improve this opinion.
