It is often regarded that the Balkan Region must have to ‘learn’ from Western markets and not the other way around. I’ve now been living in Turkey since only last summer so it hasn’t even been one full year, however I can assure you that there is plenty of learning to do on both sides of the coin.
I do not believe in the fact that ‘best practices’ and ‘know-how’ are what the region can take from western markets. More often than not, many industry experts in this region have received their grooming in western companies in the first place. They automatically bring ‘most’ of the practical knowledge with them as they represent western funds/capital.
There are, however some general complaints I often hear from local private equity and venture capital players. These are:
1. Lack of good deals
2. Unreliable management
3. Inadequate book-keeping and accounting practices
4. Deal sizes often too small
5. Lack of overall transparency and growth opportunities
Ironically, these have been the EXACT same complaints and arguments I hear from Californian investors. It seems private equity and venture capital must solve similar challenges in each region. After all, we are in the business of identifying the right deal and increasing its value before exit. This template is the same wherever you go.
So, what is it really that the Balkans region can learn from the West?
The answer is not what it can learn from the west, but what it can teach itself.
Most funds in the US are capitalized by actual US investors whereas a large majority of the funds in Turkey (and I’m assuming the Balkan region as well) is capitalized by foreigners – primarily US or European investors.
In my opinion, the critical lesson all Turkish investors must ‘teach themselves’ should be the ability to communicate the reasons why foreign investors should choose this region as opposed to any other. Turkish funds must realize that international investors do not have adequate knowledge about Turkey as they do on other places such as China, Brazil and Russia.
I have yet to see a compelling presentation as to why any investor should choose Turkey over other developing nations for their investments. I have not yet seen rates of return on private investments as compared with other nations across the globe (or even for that matter, with other European nations).
If Turkish funds want to capture more investors then they must be able to show them actual concrete evidence why choosing Turkey would be an advantage.
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