Turkey wealth fund seeks support from foreign banks

TWF asked China’s ICBC for a $5b loan for a period of 10 years, sources said

Turkey’s sovereign wealth fund has approached international banks including China’s ICBC for a loan, people with knowledge of the matter told Bloomberg, showing its first signs of life after more than a year of inactivity brought on by internal disputes over its strategy and management.

The fund, known by its initials TWF, asked ICBC for a $5 billion (Dh18.3 billion) loan for a period of 10 years, three of the people said, asking not to be named because the request wasn’t public.

Himmet Karadag, the fund’s acting chairman, and board member Yigit Bulut, who also serves as an adviser to Turkish President Recep Tayyip Erdogan, met with ICBC Turkey’s Chairman Xu Keen on October 4 in Istanbul to discuss the loan, one of the people said.

The fund was established following last year’s failed coup to safeguard what is estimated to be $200 billion worth of assets and spur large-scale investments that Turkey’s rulers say will transform the nation into one of the world’s elite economies.

But internal strife at the fund led to paralysis and eventually saw its first chief executive, banker Mehmet Bostan, lose his job in September. Erdogan promised an overhaul of the organisation and pledged to appoint a new chief after Karadag, who’s also head of the stock exchange, was asked to fill the job temporarily.

The TWF met with another international bank on Thursday to discuss a loan, according to one of the people. The fund has also been in talks with sovereign wealth fund managers in the Middle East.