When being considered in terms of private equity allocations, sometimes countries can fall between the cracks of the various geographical buckets. Turkey could easily be one of these, sitting at the crossroads between Europe, the Caucasus, and the Middle East. However, the latest data from eFront shows that, while Turkey remains mired in economic instability, the country’s private equity firms are performing strongly. Since inception, Turkish private equity funds have recorded a return of 1.61x (TVPI), above the levels seen in Western Europe (1.46x) and the US (1.5x) and well above the 1.25x for south-east Europe. Turkish private equity funds also show lower selection risk than Western European and US counterparts. This performance comes despite the relative immaturity of the private equity market in the region, showing that integrating Turkey into a broader geographical category, and so being able to allocate to Turkish funds when they come to the market, could be a compelling strategy. As its private equity market matures, it may eventually make sense to establish a South-Eastern European category, which at present does not really exist owing to the lack of sustained and significant activity.

Focus on: Turkey

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