Dubai: Private equity giant Carlyle Group L.P. is on the hunt for more investments in Turkey and Saudi Arabia, betting that economic growth in those countries will remain shielded from euro zone debt problems and political turmoil in the wider Middle East, one of the firm’s top regional executives said.
Carlyle, which listed its shares earlier this year in the US, last week concluded its sixth investment in the Middle East and North Africa, including Turkey, by buying a stake in Penti, a Turkish female clothing manufacturer and retailer. This latest deal makes the US buyout fund one of the most active players in a region where private equity activity has yet to fully recover from its pre-crisis heyday.
“The situation in Europe is a scary one, that’s something to be cautious about. On the other hand, people are still bullish,” said Can Deldag, co-head of Carlyle Middle East and North Africa and head of the company’s team in Turkey. Deldag said the wider regional economies should grow at an average of 3 per cent to 4per cent in the next four to five years, especially as governments pour billions of petro-dollars into upgrading infrastructure, part of an effort to stem unrest related to the Arab Spring.
“We may have declines for one or two years which could delay an exit or project but this region will continue to grow,” Deldag said. He added Carlyle is hoping to finalise two more investments next year, likely again in Turkey and Saudi Arabia, where all the fund’s investments took place until now, although other Gulf countries such as Oman and the UAE are also on the company’s wish list.
These investments are likely to take place in sectors related to consumer growth, Deldag said.
“The region’s growth is dependent on the increasing purchasing power of households. We like to stay close to consumer-centric sectors like tourism, retail and food,” he said.
Carlyle globally has $156 billion of assets under management. One of its key shareholders is Mubadala Development Co, a state-owned investment firm in Abu Dhabi.
Carlyle has made six investments in the region through its dedicated $500 million growth capital and buyout fund. It is looking to exit some of those investments such as Turkey’s Medical Park, for which it is following a so-called dual track process, meaning either an initial public offering or a sale to another party.