EBRD becomes a key investor in equity fund in Turkey

By Sergiy Grytsenko

The EBRD has joined forces with other international financial institutions to support Mediterra Capital Partners Fund which will  provide equity capital for medium-sized companies in Turkey.

The EBRD’s equity contribution of up to €40 million to Mediterra Capital Partners Fund is aimed at increasing the availability of equity capital for the middle-market businesses in Turkey, providing them with high standards of corporate governance and long-term funding which remains largely unavailable to Turkish clients. 

The Bank’s funding has been closely co-ordinated with Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG) and iVCi (fund-of-funds dedicated to Turkey and advised by the European Investment Fund).

According to EBRD’s Managing Director for Industry, Commerce and Agribusiness, Alain Pilloux, the new project highlights effective multi-lateral cooperation approach to developing Turkey’s private equity market.

“With this investment in Mediterra the EBRD will help mobilise further resources addressing the scarcity of equity capital within the Turkish private sector. The Mediterra Fund will play an important role in developing the private equity market in Turkey and increase Turkish companies’ access to markets and management resources improving their corporate governance and operational capacities,” he says.

The Fund will support medium-sized companies operating in both services and manufacturing, in sectors ranging from energy, healthcare and retail to telecommunications, media, agriculture and natural resources.

The Fund will make a significant contribution to balanced growth in the Turkish economy by supporting 6-10 multi-sector investments in the form of growth capital or selective buy-outs. It will consider making equity investments in Turkish middle-market businesses with individual investments ranging from €20 million up to €50 million.

“We are very pleased to see this strong support from our international partners who recognised the unique investment platform created by Mediterra. It combines both global and local private equity experience of our team with an Advisory Council established by Turkey’s leading executives as well as the network of the Turkish industrialist families who have become limited partners in the Fund,” Ahmet Faralyali, founding partner of Mediterra Capital Fund, has said.

In Turkey, the EBRD focuses on renewable and sustainable energy, small business development in the regions, agribusiness, municipal and environmental infrastructure, and privatisation.

Since the beginning of its operations in Turkey in 2009, the EBRD has committed nearly €650 million across 27 private sector projects with a total project value of almost €2 billion. In 2010, the EBRD invested approximately €500 million in Turkey.