Abraaj banks on Turkey

The UAE-based firm is acquiring a minority stake in Fibabanka through Abraaj Turkey Fund I, which is currently closing in on its $500m target.

The Abraaj Group is acquiring a minority stake in Turkey’s Fibabanka. The transaction is understood to have been made through the UAE-based firm’s Abraaj Turkey Fund I that is currently in market seeking to raise $500 million.

In April, the fund had raised $465 million toward its target, as reported by Private Equity International. Investors in the fund include the European Bank for Reconstruction and Development (EBRD), the European Investment Fund and the International Finance Corporation (IFC).

Abraaj declined to comment on the progress of the fundraising.

The transaction is Abraaj’s ninth in Turkey and the firm’s eighth of a financial services business, it said.

“[Fibabanka] represents a compelling opportunity to tap into the underpenetrated banking sector in Turkey where 40 percent of the population remains unbanked and household leverage ratios are low as compared to Europe,” Abraaj founder and group chief executive Arif Naqvi said in a statement.

Abraaj is understood to be acquiring a 9.95 percent stake in the bank in which the EBRD and IFC are already shareholders. Fibabanka has assets of $4.3 billion, a loan book of $3.2 billion and 70 branches across 18 cities in Turkey. The value of the transaction was not disclosed.

Fibabanka was acquired in 2010 by Fiba Group, a conglomerate with holdings in financial services, retail, energy, healthcare and real estate with total assets of $17 billion, according to Abraaj.

Abraaj’s existing financial services investments include in Turkish insurance company Acibadem Insurance. Once this latest transaction completes, Abraaj will have invested $900 million in Turkey since 2007, it said.

The announcement follow’s pan-European firm Bridgepoint’s acquisition earlier this month of Turkish dried fruit and seeds producer Peyman for an undisclosed sum.