Turkish group holds maiden close

Buyout firm Mediterra Capital Management has held a first close for its debut Turkey-focused private equity fund on €100m, one third of the way towards its target.

Turkish private equity firm Mediterra Capital Management has raised €100 million and held a first close for Mediterra Capital Partners I, the firm said in a statement. It is targeting €300 million. 

The European Bank for Reconstruction and Development (EBRD) has committed up to €40 million to the fund, according to its website.

MCP I will invest primarily in Turkish companies with enterprise values in the €50 million to €250 million range, deploying capital through buyouts as well as growth capital-style deals which offer significant minority stakes in the target businesses, the firm said.

Mediterra was founded by Murat Erkurt, a former partner at Lehman Brother Private Equity, and Ahmet Faralyali, a former executive at Kohlberg Kravis Roberts.

Erkurt said: “Turkey has emerged as one of the fastest growing large-scale economies of the world and as a regional leader with its young population of 74 million as well as its strong export base for Europe, Middle East and Africa. We aim to deploy our extensive global institutional private equity experience to create value for our investors by generating sustainable growth and institutionalisation with high standards of corporate governance for our portfolio companies in Turkey.”

Erkurt said that along with the EBRD, other investors in the fund included Turkish fund of funds group iVCi, which is advised by the European Investment Fund, and Deutsche Investitions und Entwicklungsgesellschaft (DEG). A range of high net-worth individuals in Turkey also committed to the fund.

Alain Pilloux, managing director for industry, commerce and agribusiness at the EBRD, said: “The Mediterra Fund will play an important role in developing the private equity market in Turkey and increase Turkish companies’ access to markets and management resources improving their corporate governance and operational capacities.”

There are relatively few Turkey-focused private equity firms, however the market is growing. Examples include Actera Group's $500 million fund, which closed in 2007, and Turkven Private Equity's 2007 vintage fund, which raised $428 million, according to Private Equity International data.

PEI will host its annual Turkey Forum in Istanbul in September.