The firm, with five exits since its first Turkish investment in 2007, is in talks with companies including in the food and education industries, Selcuk Yorgancioglu, Abraaj’s regional head for Central Asia and Turkey, said in an interview on December 17.
Abraaj, which has $7.5 billion in global assets under management, bought 80 per cent of Yorsan for an undisclosed price this month. Private-equity investors including The Carlyle Group LP, BC Partners Ltd and KKR & Co LP are seeking to benefit from annual average economic growth that’s exceeded five percent in Turkey during Prime Minister Recep Tayyip Erdogan’s decade-long rule.
“We will have an active year in 2014,” Yorgancioglu said in Istanbul. “We want to have at least one opportunity turned into reality next year.”
“Assets in Turkey are more expensive than those in other countries,” Yorgancioglu said. Even so, the country’s economic growth, projected by the government at four per cent in 2014 and five per cent in 2015 and 2016, and a young population make it “an attractive market,” he said.
A price comparison calculated by dividing a company’s earnings before interest, tax, depreciation and amortisation to the sum of the value and debt, is 8.7 in deals this year in Turkey, compared with 6.9 in Eastern Europe, according to data compiled by Bloomberg.
The ratio of private-equity investments to gross domestic product in Turkey is 0.05 per cent, compared with 0.15 per cent in the group of Brazil, Russia, India and China and one per cent in the US, Yorgancioglu said.
“So investment potential for private equity is huge in Turkey,” he said. “We like the assets from the industries which have consumers in their direct focus.”
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