In all of these aspects of investments, companies are now taking more healthy steps. Many companies which in the past used to enter a business with their eyes closed are now turning more towards niche businesses. Those who want to grow without making any concessions in terms not only of capital but also in terms of time or image are studying in greater detail all of the aspects of an investment. They are identifying the criteria very clearly. For example, Akfen Holding is looking for a monopoly in any new sector is going to enter. Astaş has announced that it will only make investments in niche areas. HSBC is looking for a profitability rate of at least 15 to 20 per cent in a bank it wants to buy. All of these criteria show that “reliable” investors are following nine new trends.
1- THE PRIORITY IS A VIRGIN MARKET
The first thing that the Ar Companies Group, which has grown to giant size through foreign investments in foodstuffs, does in foreign markets is to acquire property. Ar Companies Group Chair Hasan Arslan says that this approach enables investors to feel sure of themselves. “As a result, they know that if there are economic or political problems we will not pick up our jacket and leave.” The criterion for Global Yatırım when it makes investments abroad is being the first foreign player in the region. The clothing brand Kiğılı favours growth in developing countries. Kiğılı CEO Hilal Suerdem says: “Becoming part of something which is newly developing provides us with the opportunity to put down roots and become more long-lasting.”
2- WHAT IS NECESSARY FOR A FACTORY
The calculations are made more meticulously when the investment includes opening a factory. For example, five years ago, İnci Holding would not make any factory investments which had no return. Ar Companies Group Chair Hasan Arslan says: “The location of our plant should be close to a railroad and provide us with shipping and logistical advantages.” Local regulations and any investment incentives play an important role in physical investments. Arslan says that the most important question facing an investor is to be sure that the incentives are sustainable and that they always monitor incentives.
3- SEEING AHEAD IS İMPORTANT
HASAN ARSLAN / AR COMPANIES GROUP BOARD CHAIR
Our first criterion when going into a new business is that the sector which we are going to enter must be open to development for the next 10 years. It is very important that we are able to see whether there is potential for growth both domestically and abroad and whether the regulatory authorities will or will not enable the sector to grow. Our other criteria include the size of the market, competition and profitability rates.
4- A SENSITIVE APPROACH TO ACQUISITIONS
Every company has different targets and looks for different characteristics when it is thinking of making an acquisition. For some companies, it is price which takes priority, while others give greater importance to profitability and image. Yıldız Holding CFO Cem Karakaş says that they are looking to acquire three to four companies which produce cakes and chocolates in Eastern Europe, the Middle East and Africa. Karakas notes that the smallest of the companies they are thinking of buying may have a turnover of $40-$50 million and the largest a turnover of $400-$450 million. Samir Assaf, chief executive of HSBC’s Global Banking and Markets business, says that the first criterion in many acquisition is a profitability rate of 15 to 20 per cent.