Turkey attracts $9 billion from Gulf
Posted by meb at November 1st, 2008
Turkey has scored yet another major investment, totaling nearly $9 billion, from a major Gulf investment fund despite the ongoing turbulence in the global financial markets.
Turkish officials were quick to portray the investment as a vote of confidence and a sign of the success of Turkey’s economy in recent years. “We punched through the face of the crisis,” senior executives of the fund said. The investment is primarily focused on the agricultural industry in Turkey, particularly the multi-billion dollar Southeastern Anatolia Project (GAP), officials said.
Vision3, a strategic alliance between Ithmaar Bank B.S.C., Abu Dhabi Investment House and Gulf Finance House — all globally respected financial institutions in the Gulf region — signed an agreement yesterday with the Investment Support and Promotion Agency of Turkey (ISPAT) at Dolmabahçe Palace in İstanbul.
ISPAT President Alpaslan Korkmaz, State Minister and Deputy Prime Minister Nazım Ekren, Ithmaar Bank B.S.C. Chairman Khalid Abdulla Janahi, Gulf Finance House Chairman Esam Janahi and Abu Dhabi Investment House Managing Director Rashad Janahi attended the ceremony.
Starting with an upfront capital payment of $1 billion, the fund will allocate $3 billion to the Turkish agricultural sector in 2009. The total capacity of the fund, named AgriCap, is $6 billion, and Turkey is the first country to sign a preliminary agreement with it. “It may leverage up to $9 billion and may even go higher if we can bring additional investors along with us,” Abdulla Janahi said. He noted that there has been much interaction between Turkey and Gulf countries in recent years and that meetings between top officials have paved the way for more investment. Noting that the fund also covers the hospitality, entertainment, tourism and energy sectors, he said they may be interested in deals in these areas as well.
Ekren said his government has decided to make substantial infrastructure investments in agriculture to make investment in the real economy desirable for potential investors.
Stressing that the goal is to make Turkey a country of choice for real economy investments, he explained that the private sector may capitalize on this infrastructure by investing in organic farming, tourism and sustainable energy. Ekren stressed that the food and commodity market is gaining strategic importance and that Turkey is committed to modernizing its agriculture and raising the living standards of its people.
Korkmaz said their new investment strategy is to attract investments to the real economy from funds with an abundance of liquidity. He said these investments will generate employment and enhance agriculture projects like GAP, the East Anatolia Project and the Konya Plains Project, all of which will boost the economy in the region.
Korkmaz said: “We are very proud that such an important first step targeting our agricultural sector — definitely one of our country’s strategic powers — has been taken during such a time of global economic slowdown. This step also translates into a confirmation of the trust placed in our country.” He stressed that his agency’s overall aim was to secure value-added investments that will also provide know-how and employment.
Also speaking at the ceremony, Rashad Janahi commented: “The Republic of Turkey has a centuries-old agricultural tradition and is home to some of the most fertile arable land in the world. Given the positive ambition that characterizes AgriCap, together with the depth of agricultural know-how across this great country, there is a vast amount we can achieve in the identification of visionary agriculture initiatives. Turkey has a proud agricultural heritage and a government that appreciates the visionary goals AgriCap has set. We applaud their foresight and look forward to working closely with them in the identification of unique agricultural opportunities.”
Vision3 initiatives follow intensive due diligence and individual feasibility studies that confirm a high level of demand across the infrastructure, agriculture and hospitality markets. While each of the alliance’s three financial institutions will leverage their networks and experience in the creation of AgriCap, they will all operate as stand-alone businesses under their own management structure.
Abu Dhabi Investment House was established in 2005 as an investment company under the supervision of the UAE Central Bank. It provides comprehensive products and services that include private equity, real estate investments, investment advisory services and fund management. It was founded by a combination of leading financial institutions and a group of prominent businessmen and investors from the Gulf region. It enjoys unique relationships with various leading financial and investment institutions, including prominent decision makers in the Gulf region and Europe. Since its inception it has been associated with major landmark infrastructure projects across the region including Beirut Gate (Lebanon), Entertainment City Qatar (Qatar), Sunset Hills, Porta Reef and the Lagoon (Kingdom of Bahrain), in addition to enormously successful investment funds. Today, in less than three years, the investment house has successfully launched over 13 funds and manages approximately $4 billion.
Founded in 1999, Gulf Finance House has grown rapidly to become one of the most respected investment banks in the Middle East. Over a nine-year period Gulf Finance House has successfully launched and announced economic infrastructure development projects and investments with an aggregate end value exceeding $30 billion. Its shares are actively traded on the London Stock Exchange, the Kuwait Stock Exchange, the Bahrain Stock Exchange and the Dubai Financial Market. Key businesses include Development Infrastructure, Venture Capital & Private Equity in MENA and Asset Management. It boasts a strong track record of launching economic infrastructure transactions. Venture capital is also becoming an important contributor to revenue alongside economic infrastructure. Most of its transaction deals are largely unleveraged. Historically, it has raised approximately $1 billion in equity annually and is expected to raise $2-3 billion annually from this year onwards.
Ithmaar Bank, a 24-year-old financial institution, is a full service investment bank licensed by the Central Bank of Bahrain and has business spanning the Middle East, North Africa, South Asia region, as well as Asia Pacific and Europe. Ithmaar went public in March 2006 and its shares today are traded on both the Bahrain Stock Exchange and the Kuwait Stock Exchange. Ithmaar and its various subsidiaries and affiliates (together the Ithmaar Banking Group) cover a wide range of financial services, including investment banking, commercial and private banking, equipment leasing and real estate development. As of June 30, 2008, Ithmaar had total assets, including funds under management, of $4.66 billion and total equity of $1.33 billion. For the year ending Dec. 31, 2007, Ithmaar’s net profit was $188.3 million.
Ithmaar is a growth-oriented institution whose business is currently in the developmental stage and is premised on growth opportunities in its core direct business areas, which are private equity, investment banking and private banking.
source: Today’s Zaman
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