In an engaging fireside chat, Neil Harper, Chairman of Turkven, shared his insights on the investment outlook in Turkey for the next three years. With a wealth of experience in private equity, Neil provided a comprehensive overview of the Turkish market, discussing its evolution, challenges, and opportunities.
Key Takeaways:
- Cycles in the Turkish Private Equity Market: Neil highlighted the various cycles in the Turkish private equity market, from its early days in the 2000s to the current landscape. He emphasized the impact of macroeconomic factors, such as inflation and currency fluctuations, on the market.
- Investor Interest: Neil noted that investor interest in Turkey has been declining due to the country’s economic challenges, but he believes that green shoots of commercial interest are emerging, particularly among DFIs (Development Finance Institutions).
- Defending and Creating a Fortress: To succeed in the Turkish market, Neil stressed the importance of building strong relationships, leveraging international expertise, and developing a deep understanding of the local market.
- Origination and Deal Sourcing: Neil emphasized the need for a robust origination process, highlighting the importance of industry dynamics, people involved, and deal crystallization.
- Specialization vs. Generalization: While specialized firms are gaining traction in mature markets, Neil believes that generalist firms like Turkven will continue to thrive in emerging markets like Turkey.
- Platform Deals and Buy-and-Build: Neil anticipates an increase in buy-and-build deals in Turkey, driven by the country’s fragmented industries.
- Private Credit: The private credit market in Turkey is underdeveloped, with limited credit availability, and Neil expects this trend to continue.
- Exit Environment: Neil is optimistic about the exit environment in Turkey, predicting an increase in strategic interest and IPO activity.
- Secondary Market: The secondary market in Turkey is relatively underdeveloped, but Neil sees opportunities for GP-led secondary deals.
- Investor Concerns: Apart from inflation and currency, Neil believes that investors are concerned about the relatively strong returns in developed markets, making it challenging for emerging markets like Turkey to attract investment.
Key timestamps:
00:09 Introduction to the Fireside Chats
01:45 Investment Outlook in Turkey
04:03 Market Dynamics and Challenges
06:01 Current Economic Landscape
10:28 Competitive Landscape in Turkish Private Equity
13:03 Key Characteristics of Successful Practitioners
14:58 Future Hiring Trends in Private Equity
16:11 Transaction Origination Strategies
18:38 The Shift Towards Specialization in Private Equity
19:48 Generalist vs. Specialist Firms in Emerging Markets
21:41 Trends in Buy and Build Strategies
22:31 The Role of Independent Players in Private Equity
23:23 Future of Exits in the Turkish Market
24:18 Secondary Market Activity in Turkey
25:50 Investor Concerns in Emerging Markets
26:47 The Importance of Emerging Markets in Investment Portfolios
