Group Led by Bankers Trust To Fund Turkish Ventures

ISTANBUL -- Led by Bankers Trust New York Corp., U.S. and British institutional investors and prominent Turkish companies have formed Turkey's first venture-capital initiative and have established a funding target of $40 million.

The closed-end fund will be advised by TurTrust, a 50-50 joint venture between Bankers Trust and Turkpetrol, a privately owned distributor of refined petroleum.

Although the fund is not large by international standards, analysts say they believe it is significant because it will give major institutional investors their first experience in Turkey.

Some Top Names

The fund's general manager, David Johnson, said investors that have committed capital include General Dynamics Corp., London-based Hancock International Private Equity Management Ltd., and the Abu Dhabi Investment Authority. Mr. Johnson would not divulge any more names, saying it was "uncertain and unlikely" that others will be disclosed.

The fund, called the Turkish Private Equity Investment Co., is incorporated in the Netherlands Antilles.

"TurTrust will identify, evaluate, negotiate, structure, and present investment opportunities to the fund's investment committee," said Mr. Johnson. He said he expects $10 million of the targeted $40 million capitalization to come from Turkish sources.

Search Has Begun

Mr. Johnson said the main investors would be U.S. and British institutions, blue-chip Turkish companies, and foreign companies in Turkey.

TurTrust had looked at about 60 prospective investments, mainly in tourism and leisure, textiles, and consumer goods. It has a particular interest in introducing franchising, Mr. Johnson said.

The highest-priority deal at present is in the tourism sector, where TurTrust is looking into putting up "last-in capital" to finish a project near the Mediterranean town of Antalya using the fund's money and other investors.

"We're looking for companies with good cash flow prospects that are struggling, or healthy firms that need capital," he said.

"We're looking for three to four years [before withdrawing from a project] and a minimum of 30% to 40% return on equity per year in dollars."

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