VANCOUVER, British Columbia -- Two of Canada's biggest pension funds joined forces Tuesday to make private investments in Turkey as both look to deepen exposure to fast-growing emerging markets.
The Canada Pension Plan Investment Board and a unit of the Ontario Teachers' Pension Plan, said they have each invested 75 million euros ($97 million) to set up a fund to hunt for buyout and equity investments in the European Union candidate country.
The fund, to be called Actera Partners, will be the largest private equity fund in Turkey and expects to have raised 250 million euros by the middle of the year, they said.
"Turkey is an attractive private equity market, with a large and growing population, a high number of quality mid-market businesses, and a developing economy which is expected to benefit from becoming increasingly harmonized with Europe," said Jim Leech, senior vice-president of Teachers' Private Capital.
Turkey targeted economic growth of as much as 6 percent in 2006. Full year data has not yet been released.
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Teachers' Private Capital is the private investment arm of the Ontario Teachers' Pension Plan, a C$100 billion ($85 million) fund managing the pensions of 264,000 working and retired teachers in Ontario. It has more than C$13 billion in assets.
The CPP Investment Board is the money manager of the C$103 billion Canada Pension Plan, the country's biggest pension fund.
Mark Wiseman, senior vice-president of private investments at CPP Investment Board, said the money manager was "actively considering" investments in other emerging markets.
"Emerging markets have a very significant economic potential over the long term and we have a long-term investment horizon," he told Reuters in an interview.
Teachers' Private Capital has already made a foray into South Africa.
Actera Partners will look for investments across a range of industries — Wiseman mentioned manufacturing and services — and will also partner with Turkish companies wanting to expand abroad. The fund will be led by Isak Antika and Murat Cavusoglu.
Fueled by healthy debt markets and unprecedented fund-raising, private equity firms conducted some US$700 billion of buyouts in 2006. As more investors climb in, finding acquisitions is getting harder and purchase prices are rocketing.
"It's a time to be very cautious," Leech told Reuters
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