The Private Equity Review - Turkey Investing


i. Deal activity

Before the Capital Markets Law No. 6362 (CML)2 entered into force and the related
secondary regulations were issued, private equity (PE) in Turkey was structured either
by way of a venture capital investment company (VCIC) or a PE fund established in a
foreign jurisdiction (offshore PE fund), which would either directly acquire shares in
Turkish portfolio companies, or acquire them indirectly through a special purpose vehicle
(SPV). Following recent regulatory transformations, however, the Capital Markets Board
of Turkey (CMB) issued the Communiqué on Venture Capital Investment Companies
(VCIC Communiqué) and the Communiqué on Venture Capital Investment Funds
(VCIF Communiqué), which enable the establishment of venture capital investment
funds (VCIFs) in Turkey.
After the VCIF Communiqué’s entry into force, RHEA Asset Management, an
independent investment management firm in Turkey, was the first to apply to the CMB
for the establishment of a VCIF, known as InfraTurkey, to operate in the Turkish market.
Although some time has passed since the introduction of the VCIF tool, the market still
has room for more players.
VCIFs remain rare in Turkey, but VCICs and offshore PE funds invest in a wide
variety of sectors and portfolio companies. In the previous year, energy and e-commerce
were the most popular sectors, for PE deals, which were followed by deals in food and
beverages, internet and mobile services, financial services, and the manufacturing sector.
2015 has seen an increase in PE deals with an aggregate deal value of US$3.1 billion.

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The Private Equity Review
Reproduced with permission from Law Business Research Ltd.
This article was first published in The Private Equity Review – Edition 5
(published in March 2016 – editor Stephen L Ritchie)
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