Abraaj targets $500m for Turkey fund

The firm invested in Turkish dairy producer Yörsan Group in January

The Abraaj Group is currently in market attempting to raise $500 million for a dedicated Turkey fund, according to two sources with knowledge of the matter.

It is unclear when Abraaj aims to finalise the fundraising precisely, but it is understood that it hopes to hold a closing towards the end of this year.

The fund, which came to market earlier this year, will be Abraaj’s first dedicated Turkey buyout fund, the sources said.

As well as raising a Turkish buyout fund, Abraaj is also attempting to collect just under $40 million for its G43 Anatolian Venture Capital Fund, according to Private Equity International’s Research and Analytics division. So far, the fund has amassed approximately $25 million. The vehicle, which is an initiative of the European Investment Fund and the Turkish Ministry of Science, Industry and Technology, aims to support small and medium sized businesses in the least developed areas of Turkey.

Abraaj declined to comment on fundraising.

News of Abraaj’s fundraising comes after the group acquired a majority stake in Turkish dairy producer Yörsan Group, alongside the European Bank for Reconstruction and Development (EBRD) and the founding Yörük family, in January. Yörsan was Abraaj’s eighth deal in Turkey since 2007, according to a statement at the time. The firm declined to specify which fund it used for the investment.

While a number of Turkish-focused GPs are in market, not a single Turkish-focused fund has held a final close so far this year, according to PEI’s Research and Analytics division.

Turkey has been suffering from macro-economic challenges in the last year or so – from domestic political upheaval, to currency volatility, to broader political unrest in neighbouring countries.

“We [remain positive about Turkey; but] if you were to ask international LPs, maybe the situation would be different, because they are not as close to the market as we are,” Jean-Philippe Burcklen, deputy director of equity fund investments at the European Investment Fund, told delegates at PEI’s sixth Turkey Forum earlier this week.

The Turkish buyout market is however very under-penetrated, with relatively little competition, Baris Gen, senior investment officer at the International Finance Corporation, added during one of the panel discussions. “The market isn’t too crowded, [as you see] in other [emerging] markets like China and India. So the GPs that can raise money right now will still not [operate] in a competitive environment. And LPs can benefit from that as well.”