Case Details
Global Hospitals Group: A Private Equity Investment Under Strain in Turkey
Between 2011 and 2013, Martinart Capital led a consortium that invested over USD200 million in Global Hospitals Group (GHG), a large private hospital chain in Türkiye (Turkey). The deal was structured as a turnaround investment: the consortium would deploy capital, assume effective board and management control through a contractual governance framework, and transform a financially distressed hospital group into a profitable platform. Within months of initial investment, it was clear that the operating reality diverged sharply from what due diligence had suggested. Financial records were unreliable, significant off-balance-sheet liabilities had not been fully disclosed, several hospitals lacked operating licenses, and the founder retained practical leverage over the business despite the agreed governance structure. Cash leakage from the business compounded the problem.
The case follows Emre Kati, a newly appointed investment professional at the investment firm, as he assembles the full picture of what the consortium has invested in and confronts the question of what to recommend to the fund. The case provides a vehicle for exploring due diligence rigor, deal structuring and governance in an emerging-market context, the institutional voids framework, and the practical management of a troubled investment.
Learning Objective:
1. Students will be able to identify the key deficiencies in a private equity due diligence process by applying a structured due diligence framework to the GHG investment and determining what information was missing, unreliable, or inadequately verified.
2. Students will be able to assess the effectiveness of a deal structure in protecting investor interests by analyzing the gap between the contractual governance rights agreed in the GHG transaction and their practical enforcement in an emerging-market context.
3. Students will be able to apply the institutional voids framework to identify market, business, and institutional voids in the Turkish private healthcare environment and explain how those voids contributed to the challenges faced by the Consortium.
4. Students will be able to formulate a recommendation for Martinart Capital by evaluating the options available to the Consortium and weighing the trade-offs among continued operational engagement, legal enforcement, deal restructuring, and early exit.