Investors eye Turkey’s sovereign fund
Advisers still working to value assets, including stakes in state-owned Ziraat Bank
Turkey’s new sovereign wealth fund is attracting “serious” global interest, particularly from investment banks, and it plans to sign a memorandum of understanding with three other sovereign funds, its head said.
Mehmet Bostan said in an interview he planned to finalise a strategy plan for Turkey Wealth Fund and present it to the cabinet soon, focusing on boosting growth and expanding capital markets.
“We see serious interest from the world’s financial centres, like New York and London. Investment banks in particular knock on the door a lot,” Bostan said.
“We are in pursuit of business models that will contribute to Turkey’s interest. There are many requests, but we want to be selective.” Turkey’s government has already transferred stakes worth billions of dollars in Turkish Airlines, major banks and other companies to the fund, which was set up last year to help finance bigticket infrastructure projects.
Bostan said advisers were still working to assess the value of the newly transferred assets — which include stakes in state-owned Ziraat Bank, the Borsa Istanbul Stock Exchange and state pipeline operator Botas.
The government has said it wants the fund to be managing $200 billion (Dh734 billion) of assets as soon as possible.
Ratings agency Standard & Poor’s has said the fund is more akin to a national development bank, with its design suggesting an effort to create a funding vehicle by leveraging up assets.
Once one of the most promising emerging markets, Turkey has been hit by political uncertainty, insecurity and a tumbling currency.
Economic output declined in the third quarter for the first time in seven years. Investors worry that long-promised structural reforms have been overshadowed by President Tayyip Erdogan’s desire to pump up the economy ahead of a referendum on strengthening the powers of the presidency.
Political control?
Bostan said Turkey Wealth Fund’s priority was to increase the value of state assets and contribute to economic growth. He said other targets included contributing to the development of companies of strategic importance, pulling more investment into Turkey, and deepening capital markets.
“We think a large variety of products can come out of this, as we have a very serious asset base. We will also carry out work in terms of Islamic financing,” he said, without giving details.
The companies would retain their existing management and policies after the asset move, the government has said.
Some analysts and opposition politicians say the move means greater political control over the companies and a decrease in outside oversight.
Selin Sayek Boke, the vicepresident for the economy at the main opposition CHP, has accused the government of trying to use the fund to transfer the “people’s property” to the “presidential palace”, a reference to Erdogan.
But Bostan said the fund would put heavy emphasis on transparency and had adopted the so-called “Santiago Principles”, a global set of guidelines for sovereign wealth funds that include independent supervision and accountability.