Russia’s RenCap bets on rapid growth in Turkey

Taylan Bilgiç

The headquarters of Renaissance Capital in Moscow is seen in this company photo. The investment bank recently acquired Mira Securities, an Istanbul-based brokerage. Company photos

It remains to be seen whether Turkey, along with other fast-growing emerging economies, will be able to weather the spillover from the troubles in developing economies. Moscow-based investment bank Renaissance Capital, however, is betting that emerging markets will continue to offer solid returns for investors.

RenCap acquired Istanbul-based brokerage Mira Securities for an undisclosed sum last month.

According to Burak Akbulut, the company’s acting chief executive for Turkey, this is only the first step in gaining a solid foothold in Turkish capital markets.

“Renaissance Capital is very experienced in all emerging markets. It aims to be the leading investment bank in emerging markets,” Akbulut said in a phone interview with the Hürriyet Daily News. “We target to be active in all aspects of Turkish capital markets – brokerage, investment banking and initial public offerings. But initially, we’ll target trading and also will have a huge focus on research.”

RenCap, led by CEO Stephen Jennings, was established in 1995. Today, it ranks as the number-one researcher in Russia, South Africa and other markets, and has the same ambitious target for Turkey.

The company’s Istanbul office will be based at the old Mira Securities headquarters in the city’s Baltalimanı neighborhood. Akbulut said there was likely to be an initial staff of 15 individuals, including researchers.

A new trend

The acquisition comes at a time when Turkey’s trade and economic ties with Russia are flourishing, echoing rapidly developing relations between emerging markets, instead of the traditional focus on tying up with the West’s developed economies.

“Fund flows between the two countries are increasing. And RenCap is going to play a key role in these flows,” Akbulut told the Daily News. “And it’s not only about Russian firms that wish to invest in Turkey. Big Turkish companies have also been investing in Russia.”

Noting Turkey’s energy imports from Russia, Akbulut said he saw energy as a major sector in bilateral ties, especially once Russia officially becomes the 155th member of the World Trade Organization at the Dec. 15-17 summit of the international trade body.

Turkey obtains 40 percent of its oil imports and 64 percent of its natural gas imports from Russia, figures that make it highly dependent on the $1.9-trillion Russian economy. “RenCap will play a key role in bringing its expertise to Turkey regarding the energy sector,” Akbulut said.

The RenCap Turkey CEO said he hoped Russian banks’ interest in Turkey would continue. Russia’s Sberbank was named as one of the potential bidders for Denizbank, the Turkish unit of Franco-Belgian lender Dexia that had to be bailed out and is now in the process of breaking up.

RenCap may also use Turkey as a “gateway” to the Middle East and North Africa given Turkey’s key role in the ongoing Arab Spring, according to Akbulut.