Turkey’s city-centre streets, once the preserve of rundown cafés and unemployed men, are filling with gleaming new consumer goods stores. Selling everything from washing machines to swimming costumes, Turkish retailers are booming.
Even firms in the consumer sector whose profitability is fairly average by Turkish standards are now expanding rapidly at home and often in other emerging markets too. Domestic success has been driven by per capita income that by some counts has almost tripled in the past 10 years. GDP growth has averaged around 5%, while retail lending has remained buoyant.
The success of Turkish firms in retail and related sectors has meant an expanded number of clients in Istanbul for international investment banks – and a surge in interest in the country from private equity.
Local private equity firms Turkven and Actera have raised new funds of about $1 billion each from global investors this year, breaking the previous record for Turkish private equity funds. Although private equity investment is still low compared with other G20 economies, many of the larger, better-known international private equity firms are looking to establish, or more frequently expand, businesses in Turkey.
"Most private equity funds that need to, already have a presence in Turkey, but I expect them to increase their exposure," says Gokce Kabatepe, managing director at Raiffeisen Investment in Turkey.
