Private equity queues up in Turkey’s retail sector

Dominic O’Neill
Published on:

Private equity groups see the country as a rare growth market, particular the consumer sector. The only difficulty is fending off competition from other funds – plus finding reasonable valuations and owners willing to give up control.

Turkey’s city-centre streets, once the preserve of rundown cafés and unemployed men, are filling with gleaming new consumer goods stores. Selling everything from washing machines to swimming costumes, Turkish retailers are booming.

Even firms in the consumer sector whose profitability is fairly average by Turkish standards are now expanding rapidly at home and often in other emerging markets too. Domestic success has been driven by per capita income that by some counts has almost tripled in the past 10 years. GDP growth has averaged around 5%, while retail lending has remained buoyant.

The success of Turkish firms in retail and related sectors has meant an expanded number of clients in Istanbul for international investment banks – and a surge in interest in the country from private equity.

Local private equity firms Turkven and Actera have raised new funds of about $1 billion each from global investors...