The International Finance Corporation (IFC) is considering a commitment of up to €25 million to a new private equity fund targeting lower mid-market companies in Turkey, as the country’s private equity industry seeks to recover from a prolonged downturn in investment.
The proposed investment in Astra Equity Partners I SCSp, or Astra I, would make IFC an anchor investor in the Luxembourg-domiciled fund, which has a target size of €200 million, according to project details seen by CrowdFund Insider.
Astra I will be managed by Istanbul-based Astra Equity Partners and will invest in smaller and mid-sized companies across consumer, industrials, manufacturing, technology, healthcare, food and agriculture, and climate-related sectors.
The fund is expected to invest in around eight to 10 companies. According to IFC’s project description, portfolio companies could generate economic benefits through job creation, expansion of supply chains, productivity improvements, and higher wages.
The proposed commitment comes against a backdrop of weak private equity activity in Turkey. IFC said the country’s private equity industry has experienced a significant downturn since 2018, with Turkey attracting only limited private equity investment and only a small number of funds closing since the currency crisis that year.
IFC said its commitment would be important to Astra’s first close given the difficult fundraising environment.
As an anchor investor, IFC expects its participation to help attract additional investors and support the fund in reaching its €200 million target, while reducing perceived investment risk for other potential limited partners.
The investment would also provide support to Astra in strengthening its environmental and social management system in line with IFC’s Performance Standards.
Beyond providing capital to individual companies, the fund is expected to demonstrate that locally based private equity managers can maintain operations and attract domestic capital, potentially helping strengthen competition in Turkey’s private equity market.
Astra I will use a lower mid-market investment strategy, targeting businesses where private equity capital and operational improvements can support expansion.
The fund’s sector mandate covers a broad range of industries rather than focusing on a single segment of the Turkish economy.
The proposed IFC investment is subject to the applicable approval process. If completed, it would give Astra I a major institutional anchor as it seeks to raise the remainder of its €200 million target from other investors.
The proposed transaction also highlights the role of development finance institutions in supporting private capital markets where fundraising conditions remain challenging.
For Turkey, the investment comes as private equity managers seek to rebuild the market following years of reduced activity and constrained access to institutional capital.