Turkish entrepreneurs optimistic; opportunities abound for wealth managers

Today UBS and Campden Wealth published the key findings of the Turkish Entrepreneurship Report, which offers unique insight into the thoughts of Turkey’s dynamic, influential entrepreneur class. Leveraging proprietary research conducted during the summer and autumn of 2013, Turkish Wealth Builders: Family Businesses Cultivate Economic Growth explores how leading Turkish business families are shifting attention toward planning for the future and implementing strategies to create cross-generational legacies.
Key findings of the report include:
  •  Business leaders are optimistic about Turkey’s business prospects, with 88% of participants planning to expand domestic operations. More than 90% of participants expect to fund their business development with internal cash flows, with almost 60% saying they also plan to raise debt.
  •  Half of Turkish entrepreneurs surveyed currently have more than 75% of their total wealth invested in their business, allocating the remainder to real estate holdings and investment-grade fixed income securities. Those remaining Turkish entrepreneurs, who have divested more than 25% of their wealth from the operating business, have invested predominately in real estate, private equity and liquid deposits.
  •  Local banks are held in high regard: more than 80% of participants have accessed capital from local banks within the last 12 months, compared to 29% using international banks.
  •  A shift emerged in the wealth management plans among 3rd and 4th generations, who place higher value on formal wealth management and sound governance structures than their predecessors, viewing both as steps toward solidifying the economic gains made by their predecessors over the last few decades. Almost two-thirds of next generation participants use wealth management services regularly, much more than the overall participant average of 50%.
  •  Eighty-five percent of this group rate ‘trust’ as the most important criterion for wealth management advisor relationships. While ‘trust’ is a key factor across generations when selecting wealth managers, the next generation gives ‘investment track record’ equal importance, twice the rate attributed by older generations.
Opportunities reside with next generation of Turkish business leaders
Coupling higher rates of educational achievement with international travel experience, the next generation of Turkish wealth builders appear primed to adopt more sophisticated
business and wealth management mechanisms. "The findings suggest a shift in how wealth is managed in the country, which creates the opportunity for global wealth managers and family office service providers to tap into the market by focusing on the next generation of Turkish wealth builders," concludes Dominic Samuelson, CEO of Campden Wealth.
While the economy is forecasted to grow by 4% over the next two years1, the next generation of Turkish Wealth Builders face a host of macroeconomic challenges – including a current account deficit, high interest rates and a weakened lira – to make their marks in business and investing. Wealth management professionals may get a chance to prove themselves in the coming years.
Gonca Gürsoy Artunkal, CEO of UBS Turkey, added: "From liquidity concerns to an increased interest in governance structures, these findings reinforce what we’re seeing in the market, underpinning our strategy to support our Turkish clients. As a prominent wealth manager with a key focus on private business owners, UBS is pleased to support this study in an effort to deepen our understanding of client needs, which will help to enhance and adapt our client offering.”
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Notes for Editors
The UBS/Campden Wealth Turkey Wealth Builders Survey 2013 is the result of proprietary research undertaken with Turkish business leaders in the summer and autumn of 2013. The participating wealth builders completed an extensive questionnaire and offered insight during in-depth interviews, typically lasting an hour, conducted by members of the Campden Wealth Research team. An exclusive selection of Turkish business leaders, active across the manufacturing, energy, retail and transportation industries, participated in the study. All participants were ultra high net worth, with business revenue and personal net worth ranging from below $50 million to well over $1 billion.
UBS/Campden’s Turkish Entrepreneurship Report 2013 explores four major dynamics of Turkish wealth builders’ experience: business development, family participation, wealth management and governance, education and sustainability. In addition to affording insight into key issues such as the Anatolia-Istanbul nexus and pension markets, the report draws comparisons and distinctions across geographies and wealth profiles, including Russian entrepreneurs, Middle Eastern wealth holders and family office leadership in Asia and Europe.
About UBS
UBS draws on its 150-year heritage to serve private, institutional and corporate clients worldwide, as well as retail clients in Switzerland. Its business strategy is centered on its preeminent global wealth management businesses and its leading universal bank in Switzerland. Together with a client-focused Investment Bank and a strong, well-diversified Global Asset Management business, UBS will expand its premier wealth management franchise and drive further growth across the Group. Headquartered in Zurich and Basel, Switzerland, UBS has offices in more than 50 countries, including all major financial centers, and approximately 61,000 employees. UBS AG is the parent company of the UBS Group (Group). Under Swiss company law, UBS AG is organized as an Aktiengesellschaft, a corporation that has issued shares of common stock to investors. The operational structure of the Group comprises the Corporate Center and five business divisions: Wealth Management, Wealth Management Americas, the Investment Bank, Global Asset Management and Retail & Corporate. In 2014, UBS celebrates its 20th anniversary in Turkey.
About Campden Wealth Research
Campden Wealth Research supplies market insight on key sector issues for its client community and their advisors and suppliers. Through in-depth studies and comprehensive methodologies, Campden Wealth Research provides unique and proprietary data and analysis based on primary research. Campden Wealth Research is a division of Campden Wealth, the leading independent provider of information, news and education for family businesses, family offices and significant private investors worldwide, in person, in print and online.