More than half of foreign direct investments (FDI) have come to Turkey from private equity funds over the past 10 years. The expanding share of FDI from global private equity funds demonstrates confidence and trust in the Turkish economy.
"Our research indicates that private equity funds have constituted 62 percent of foreign direct investments in Turkey over the last 10 years," said Barış Öney, managing partner at Globalturk Capital.
Speaking to Turkish daily Dünya, Öney said that fresh money flowing into Turkish private equity funds reached $1 billion in the past year. Pointing out that such a big investment had also flowed in 2012, Öney predicted that the next big wave of this kind could come in 2020.
Öney said that the Turkish Sovereign Wealth Fund (SWF) could also act with the same private equity fund mentality.
Öney, who also serves as a financial adviser to Tunçmatik for the financing of the company's 73-megawatt solar energy project, pointed out that "capital wars" are taking place around the world, emphasizing that countries that improve the investment environment the most in this period will positively differ. Indicating that Turkey has a profile that investors cannot ignore in terms of the region in which Turkey is located, Öney said: "Almost two-third of the world population live in emerging markets, including our country." According to Öney, three-fourth of the world's gross domestic product (GDP) and its growth come from these countries; therefore, no investor can ignore these countries. "The more you rise to the position of a stable country, the more investments you attract," he added.
Next big wave to come around 2020
Emphasizing that $1 billion of fresh money has come to Turkish private equity funds despite shocks experienced in the last year and that that this is a very important flow, Öney said: "The amount of money flowing to Turkey is higher than that flowing to funds in Central and Eastern Europe and the Middle East." Asserting that Turkey has attracted the best investment in the past five years, Öney said the outflow of private equity funds, some of which have occurred in the form of public offerings in the recent period, could trigger new inflows.
Predicting that the next big wave will probably occur around 2020, Öney said that private equity fund investors are investors in the field and are different from stock market investors. They focus on companies and invest for five to seven years with a micro perspective, rather than a macro one. "If the country is stable and the company promises growth, problems in the region will not remove investment appetite," he added.
Öney said that there are many companies in Turkey that have become a power in the region and that are making progress in this direction, adding: "Turkey is the largest production base in the region spanning from Western Europe to China. Moreover, the production range in Turkey is very large. We are even better than India in this regard." Öney also warned against global turbulence and developments concerning U.S. President Donald Trump creating ambiguity, saying, "When we went to an investors meeting in the 1990s, we used to talk about Turkish companies for just five minutes, while speaking about the Turkish economy for 55 minutes." According to Öney, this changed with the EU accession process and reforms after 2004, and they started to talk more about Turkish companies than the Turkish economy in such meetings. Now, however, they have come to speak about the Turkish economy again. Touching on the fact that the world is undergoing turbulence and developments about Trump are creating uncertainty, Öney said that Turkey would have excellent global companies over the next 10 years.
"There are deep-rooted companies with century-old brands in Europe that the new generations do not want to maintain. The next step for Turkish companies is to grow through acquisitions."