Carlyle makes first Turkish investment

The Washington-DC based private equity firm has acquired half of a shipbuilding company in the increasingly popular destination for private equity investment. Carlyle’s entrance into Turkey follows firms such as TPG, KKR and BC Partners.

The Carlyle Group has made its first investment in Turkey with the acquisition of a 50 percent stake in shipbuilder TVK Shipyard. Financial details were not disclosed.

TVK, established in 2005, constructs chemical tankers and other specialty vessels with cargo volume up to 30,000 deadweight tonnage. The investment will be used to increase both the sophistication of vessels and rate of production.

Private equity activity in Turkey has been sporadic until recently when interest in the region has begun to rise. Until mid-2007, the largest Turkey-dedicated fund was $100 million raised by AIG Capital and Ata Invest. Last year, Turkish fund Actera Partners, established by Ontario Teachers’ Pension Plan and the Canada Pension Plan Investment Board closed its debut fund on $475 million.

Since 2006, activity in Turkey has accelerated. TPG’s 2006 acquisition of Mey Alcoholic Beverages was valued at approximately $1 billion and in 2007 KKR acquired shipping company UN Ro-Ro for $1.3 billion. This past February, BC Partners led a consortium in the acquisition of Migros Türk, the Turkish supermarket chain, for YTL3.9 billion ($3.25 billion; €2.2 billion) from Koç.

The Blackstone Group recently appointed Kemal Kaya, the former chief executive of Turkish financial group Yapi Kredi, as a senior advisor to provide counsel on transactions in the region.

Carlyle has $82.7 billion (€52.1 billion) committed to 60 funds. The firm invests in buyouts, venture, growth capital, real estate and leveraged finance on six continents.

The TVK transaction was conducted by Carlyle’s Middle East and North Africa team, which operates out of offices in Cairo, Dubai and Istanbul. The group invests primarily in healthy, growing companies in sectors including energy, financial services, healthcare, industrial, infrastructure, technology and transportation.