INVESTING IN TURKISH
COMPANIES
Investing
in Turkish companies is challenging before even considering corporate governance issues.
·Inflation + Macro volatility
+ Lack of management accounting
+ Lack of management accounting
·Volatility increases the option value of
being a shareholder and control
·Focused companies may be less robust in volatile
markets1
·Leverage and fixed costs are deadly in
crises – adverse selection
·Insufficient minority rights in the commercial
code
Explanation
Challenge
·Difficulty to determine past performance of
companies
·Unrealistic valuation and control expectations
·Relative scarcity of focused,
pure play companies
pure play companies
·Scarcity of companies with aggressive growth plans
·Long and complicated shareholder agreements
Source: Turkven, (1)
Harvard Business Review, July-August 1997
