Actera has raised the largest dedicated Turkey fund, exceeding its target size by 30 percent, with commitments in excess of $475 million (€322.7 million), according to the firm’s co-founder Murat Cavusoglu.
It was backed by global institutional investors, including two €75 million ($110.4 million) investments from Canadian pension funds Ontario Teachers’ Pension Plan and the Canada Pension Plan Investment Board, as well as a €44 million investment from the European Investment Fund. The firm also received an investment from the Singaporean sovereign fund GIC.
“While it is technically a first time fund, the management has in the past [had working relationships] and it is one of the most experienced groups in Turkey with respect to private equity and investment banking,” Cavusoglu said.
The fund’s first investment was the leveraged buyout of Turkey’s largest spirits company Mey Icki Sanayi in partnership with US buyout firm TPG. The buyout cost $810 million in April last year and Actera joined TPG with a smaller stake at the same valuation, after the fund’s first close on €150 million in November 2006.
There is an opportunity in Turkey at the moment, especially in the mid-market, where the firm generally operates, he said.
“Turkey used to be volatile but with recent institutional changes [including reforms by the International Monetary Fund and the European Union] Turkey will have small ups and downs.” The reforms include the independence of the central bank from government and a successful privatisation effort, he said. These reforms had brought Turkey closer to developed markets.
There has been a huge surge in mergers and acquisitions in Turkey in the last five years, he said. Financial sponsor involvement began markedly in 2006, he said. “Since the beginning of that year we have seen a sharp increase in financial sponsors in the country.”
The fund will pursue growth equity and buyout deals in roughly equal measure, he said.
Cavusoglu was previously managing director and investment committee member of Southeast Europe Equity Fund, which was sponsored by Soros Fund Management.
He co-founded Actera with Isak Antika, the managing partner of Antika Partners, an investment banking boutique, which Antika founded in 2002. This business was sold to US bank Merrill Lynch when the two individuals set up their private equity firm, Cavusoglu said.