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IFC’s Post-Financial Crisis Support of Turkey Tops $200 million
Washington, D.C. March 13, 2002—The International Finance Corporation, the private sector arm of the World Bank Group, continues its post-financial crisis support for Turkey’s private sector with a US$10 million investment in a new private equity fund in Turkey. The Fund, known officially as the Turkish Private Equity Fund I, will have a first closing at $41 million. The Fund will be managed by Turk Venture Partners Limited (“Turkven”), the exclusive Turkish affiliate of global private equity investment firm Advent International.
Khosrow Zamani, Director of IFC’s Southern Europe and Central Asia Department said: “There is a need for private equity funding in Turkey, as there are numerous small and medium sized companies with good fundamentals that face capital constraints. This new Fund, one of the first of its kind in Turkey, is expected to create a diversified portfolio of growth companies in a broad range of industries. Therefore, it should be able to play an important role in this fledging sector in Turkey.”
The Fund will be working closely with Advent and co-investing with Advent’s Central and Eastern European program. The other institutional investors in the Fund are National Bank of Greece, European Investment Bank, the Netherlands Development Finance Company (FMO), and the German Investment and Development Company (DEG).
Teresa Barger, Director of IFC’s Private Equity & Investment Funds Department said: “This investment offers IFC an exciting opportunity to work with one of the most established names in private equity in Europe to support and develop one of the first local private equity management teams in Turkey.”
The Fund will generally look for investment opportunities between $5 million and $15 million and will pursue a strategy of combining local knowledge with Advent’s global resources to accelerate the growth of its portfolio companies, both locally and internationally.
Seymur Tari, Director of Turkven, said: “Turkish companies have high growth potential, driven both by exports and a sizeable domestic market. There are a large number of well-run, mid-sized and family-owned Turkish companies, which are starting to broaden their vision and adapt their strategies to compete in international markets.”
Joanna James, Managing Director of Advent International’s Central European operations, said: “Advent, through its extensive experience with companies in emerging markets across the world, will be a valuable partner for top Turkish companies with good management teams and aggressive growth plans. We believe the time is ripe for private equity investment to begin in Turkey, paving the way for increased foreign direct investment.”
The IFC investment marks the Corporation’s seventh Turkey investment in less than a year. Since April 2001, IFC has invested more than $200 million in a wide range of companies to help weather the current economic difficulties. The investments have been aimed at boosting export revenues, improving efficiency, expanding production, and replenishing working capital.
Turkey is an important country for IFC, the fourth largest exposure accounting for about 4.5 percent of IFC’s global portfolio. IFC’s held portfolio, including amounts mobilized from commercial banks, is close to $1 billion. IFC’s program for Turkey continues to be active with investments in projects of about $400 million.
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956, IFC has committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC’s committed portfolio at the end of FY01 was $14.3 billion.
