Delta in Turkey February 2020

During our trip to Istanbul, having met with various clients across the financial services industry, we have summarized our core findings within the Turkish market for your attention

Ratings agency Fitch revised Turkey's outlook to "stable" from "negative" and along with Standard & Poor's affirmation on a stable outlook, has provided a positive momentum giving hope for 2020, however current benign global financing conditions could have a negative impact on the country's growth strategy

Turkey Deal Growth Potential

  • Following a year of almost zero growth, there are hopes that M&A as well as IPO deals could increase about threefold in 2020 from multi-year lows in 2019. It is estimated that mergers and acquisitions could exceed $10 billion this year compared with $2.9 billion in 2019, aided by a more stable lira and faster economic growth
  • International deal activity includes recent news of Croatia's M+ Group's agreement to acquire Turkish largest outsourced call centre and customer management services provider, CMC. CVC Capital Markets also announced that it will acquire from Dogus Group, the Greek, Croatian and the UAE businesses of D-Marin, a leading operator of premium yacht marinas
  • The decision from the European Bank for Reconstruction and Development (EBRD) to boost its investments in Turkey in 2020 is another indication that the country's economy is on a recovery path

Turkey Private Equity Landscape

  • During the last year there were positive indications on activity around the private equity sector as companies are becoming available cheaply for investors with a heightened risk appetite
  • Actera Group, who currently possess more than $3.3 billion of AUM targeting growth capital and buyout investments in Turkish businesses with the potential to grow internationally, successfully announced their first close for their third fund
  • It is worth mentioning that Franklin Templeton has officially finalised its acquisition of Abraaj Group's Turkish assets, that include a stake in online retail group Hepsiburada, financial institution Fibabanka, logistics company Netlog Ljistik Hizmetleri and dairy producer Yorsan Group

Hiring Trends

  • Despite the lowest volume of Turkish mergers and acquisitions in 15 years with the value being at $2.9 billion in 2019, according to a study by KPMG, there were institutions that added resources to boost their coverage capabilities. DOME Group, an independent corporate finance and M&A advisory firm, recently added as Vice Presidents Mehmet SAYIN, Goldman Sachs London and Ecem ALTIOK, Khazanah Istanbul as well as Ali ARAT, Abraaj Group, London as an Associate 
  • Private equity fundraising will see further hiring in addition to hires that took place last year by leading institutions such as Actera Group, Franklin Templeton, Mediterra Capital & Taxim Capital

Return Of Tier 1 Foreign Institutions

  • Rumors are circulating that exited tier 1 foreign institutions may be considering a return to the local market, although whether this will happen in 2020 is not evident based on discussions we have had to date

For the Delta house view and related mandates please reach out to Yiannis Demopoulos, Greg Galanis & Eren Yurdakul

We would also like to thank a dear friend for the hospitality during Fenerbahce's recent victory over LDLC ASVEL Villeurbanne for Turkish Airlines Euroleague basketball game (snapshot above)

Best Regards,

Delta Executive Search Team

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