Abraaj closes in on target for Turkey fund – Exclusive

The firm is braving macro headwinds as it seeks $500m for its debut Turkey-dedicated vehicle.

The Abraaj Group has collected $465 million in commitments for its dedicated Turkey fund, Private Equity International has learned.

The fund, which came to market in 2014, has a target of $500 million. It is unclear when the firm intends to hold a final close on the vehicle.

Abraaj declined to comment on fundraising.

Investors in Abraaj Turkey Fund I include the European Bank for Reconstruction and Development (EBRD), which committed €75 million, and the European Investment Fund, according to PEI Research & Analytics. The International Finance Corporation, part of the World Bank, has committed up to $50 million to the vehicle.

Abraaj has already begun investing the fund. In February 2015 the firm acquired a minority stake in Turkish e-commerce business Hepsiburada. Financial details of the transaction were not disclosed, but a market source indicated that the group acquired a 25 percent stake in the business for around $100 million, as reported by PEI.

Other investments for the firm in Turkey include Yu-Ce Medical, a medical gauze and sponge producer, in which it invested in August 2015, and Turkish dairy producer Yörsan Group, of which it acquired a majority stake alongside the EBRD and the founding Yörük family in January 2014.

Abraaj’s successful fundraising comes despite an onslaught of macro challenges that the Turkish market has faced in recent months, including concerns over domestic terrorism and the ongoing conflict in neighbouring Syria, and around governance and freedom of speech. Turkey is struggling to meet the conditions for its citizens to be granted visa-free travel to the European Union, and has also been grappling with a drop in the Turkish lira, which slid 20 percent against the dollar last year, the most since 2008 according to Bloomberg.

Despite its troubles, the Turkish economy showed resilience in 2015. This was in part due to plummeting oil prices which, as an importer of oil, has a positive effect on the country.