This study investigates the nature of the collaborations of the foreign investor with the local family business groups, drawing out a range of possible implications on performance. Embracing a multi-theoretical approach, we use a panel data regression analysis on a sample of non-financial companies listed in Istanbul Stock Exchange during the period of 1999-2002. We find that the interaction of the foreign investor with local business groups may have both positive and negative consequences on performance, depending on the nature of the collaboration. In the case of local firms, there is a positive relationship between performance and the presence of a chairman who is a member of the family that owns the business group. Having such a chairman seems to have a negative effect on performance when foreign investors are involved. However, equity partnership with a local family business group contributes positively to the performance of foreign-involved companies.