The writer is founder and CEO of multi-family office Karman Beyond.

The Middle East is now a popular region for foreign investors looking to deploy capital. And while many highlight the appeal of the UAE and Saudi Arabia, another country on the region’s outskirts hides in plain sight as a destination of choice.

Turkey’s growing private wealth reflects positively on the country’s prospects. Despite international headlines focusing on inflation and interest rates, its return to economic orthodoxy is boosting optimism — and its strong network of family-owned enterprises and growing pool of local capital provides a good foundation for the increasing number of foreign investors announcing projects in the country.

Economic backbone

Families power Turkey’s economy. Some 95% of enterprises in the country are family owned (according to the Turkish Corporate Governance Association); they know their industries inside-out and are resilient, having navigated many economic crises.

Crucially, many of these businesses have defied recent inflationary challenges to flourish, and this is contributing to vast increases in the country’s private wealth. Knight Frank’s Wealth Report also shows Turkey has the world’s fastest-growing rate of ultra-high-net worth individuals (UHNWI). Investment bank UBS predicts the country’s millionaire population will grow 43% by 2029 — the second-highest rate globally. 

Alongside more traditional industries, Turkey’s start-up ecosystem is fuelling this wealth generation. Its business-friendly environment — with a favourable tax regime, strong investor protection, and accessible credit — is allowing sectors including fintech, gaming and ecommerce to thrive. Foreign direct investment (FDI) has contributed to the success of many key players, with data from the Turkish Industry and Business Association showing start-ups in the country received $4.4bn in cross-border investments between 2021 and 2022.

For foreign investors looking at Turkey, partnering with its family owned enterprises or growing pool of UHNWIs is an excellent entry path. They understand the domestic market, export dynamics and business landscape — and the latter present a source of local funding that can help derisk inbound investment. Families in Istanbul and other hubs in the Anatolian heartland are open to partnering with global names possessing capital and new, global perspectives to level-up their enterprises. Foreign investors, in return, can utilise the local supply chains created and operated by these families. 

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Path to economic recovery

Family owned businesses are also willing supporters of the Turkish economy, which is showing signs of recovery and attracting greater attention from foreign investors. 

Inflation still sat at 49% in September, but is down from its peak of 75% in May and the government forecasts it to fall to 41.5% by year-end. The return to economic orthodoxy has helped, with recent Central Bank governors lifting interest rates to 50% to tackle inflation. Finance minister Mehmet Simşek, appointed in June 2023 and well-regarded internationally, is boosting confidence in the country’s economic path.

These changes have won favour with ratings agencies, with Fitch recently upgrading Turkey’s Long-Term Foreign-Currency Issuer Default Rating to BB– with a stable outlook. The country was also removed from the Financial Action Task Force’s ‘Grey List’ in June, on account of its commitment to financial regulatory improvements.

Foreign investors remain understandably cautious. Turkey has attracted around $10bn in FDI in each of the last three years, down from some $19bn in 2015. Data from fDi Markets shows greenfield project announcements hit a record high in 2022, but have been sluggish in 2024. 

Nonetheless, the opportunity in Turkey is clear. Favourable asset valuations — partly due to the weak lira — heighten its appeal to strategic investors exploring emerging markets. It also benefits from a demographic dividend thanks to half its population being under 34 years old and its large middle-class. The country’s global interconnectivity and standing as a $256bn-a-year export hub, facilitated by its strategic location straddling East and West, further boosts its FDI prospects. 

After a period of instability, Turkey’s economic transformation is well underway. The road ahead is long and inevitably paved with challenges. But the resilience of Turkey’s family run businesses and growing number of UHNWI are helping shape its economic future — and they are a resource to be tapped by foreign investors looking to take part. 

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