Istanbul, Türkiye, June 27, 2024— IFC invested €25 million in the first close of Mediterra Capital Partners III, a private equity fund managed by Mediterra Capital Management Ltd., to increase access to funding for local companies, strengthen the competitiveness of Türkiye's private equity ecosystem, and enhance gender diversity in the country's private equity market.
With a target size of €165 million, the fund aims to invest in lower mid-market companies in Türkiye, focusing on either companies that cater to domestic consumption, have an export orientation, or offer technology-enabled services. IFC's investment will be critical and catalytic for the fund to reach its target size.
Türkiye's private equity market has experienced challenges in recent years due to macroeconomic volatility and changing investor dynamics. The market, which once attracted significant international investor interest, has faced a decline in investor demand. This has resulted in a smaller number of active private equity funds compared to previous years. This situation has created a shortage of patient risk capital for companies, hindering their growth potential, income generation, and ability to provide employment opportunities.
"Mediterra is grateful to IFC, the European Bank for Reconstruction and Development (EBRD), Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO) and the Technology Development Foundation of Türkiye (TTGV) as the cornerstone investors for Fund III who have been consistently supporting Mediterra as value-added investors in our predecessor funds over the last decade," said Murat Erkurt, Co-Founder of Mediterra Capital Management.
The project aligns with IFC's strategic objectives, including boosting competitiveness and enabling services, as well as improving jobs for women, youth, and vulnerable groups. Additionally, IFC will support the fund in improving gender diversity within its investment team and portfolio companies.
"By supporting Mediterra Capital Partners III, IFC is helping address the shortage of much-needed capital in Türkiye's private equity market, supporting the country's startup ecosystem and helping stimulate economic growth," said Wiebke Schloemer, IFC Director for Türkiye and Central Asia. " The fund will bring essential growth capital to lower mid-market companies, helping them create jobs, reach new markets, and provide goods and services across a number of sectors."
International DFI investors, including the EBRD and the FMO, participated in the fund's first close.
About Mediterra Capital Partners III
Mediterra Capital Management Limited (Mediterra) is an independent private equity firm focused on investing in lower mid-market Turkish companies and manages Mediterra Capital Partners III, LP (Fund III) as well as its predecessor funds, Fund I (€164 million, 2012 vintage) and Fund II (€166 million, 2017 vintage). Since its launch in 2010, Mediterra has been a catalytic equity investor in growth-oriented Turkish companies with its consistent strategy focusing on businesses that cater to domestic consumption, have a focus on exports, or offer technology-enabled solutions. Mediterra has successfully invested in 16 portfolio companies with several further bolt-on acquisitions and exited 8 of them through sales to international strategic investors and initial public offerings, returning top-decile cash-on-cash returns to its investors among emerging market private equity funds. Fund III will continue to execute the same investment strategy as Fund I and Fund II with the experienced team focusing on delivering the best returns for its investors and generating positive impact under its selected United Nations Sustainable Developmental Goals that include (i) quality education, (ii) gender equality, and (iii) decent work and economic growth.
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org
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