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Turkey wealth fund sees Malaysia, Singapore as model as it eyes growth in Asia

KUALA LUMPUR (Aug 13): Turkey’s sovereign wealth fund is now looking for growth in Asia, as relations with the West suffer, with its chief executive officer (CEO) Zafer Sonmez describing Malaysia’s Khazanah Nasional Bhd and Singapore’s Temasek Holdings as models for the fund and “J-curve growth”.

Sonmez helms the Turkey Wealth Fund (TWF), and has done so for two years after a six-year stint with Khazanah.

In an interview with the Nikkei Asian Review, he said the fund is looking at China for investment in a number of major infrastructure projects, and to tie into the Belt and Road Initiative (BRI) much more deeply by “creating platforms and institutions that can team up with Chinese institutions”.

As Turkey lacks oil and gas (O&G) wealth like Saudi Arabia, Norway or Qatar to build up its wealth fund, Sonmez believes the TWF should look at Asia and go down the asset-backed route, leveraging valuable assets under its umbrella to create further value and profit. “I am a true believer in Asian growth,” he said.

According to Nikkei, the TWF already has a 49% stake in Turkish Airlines.

Sonmez acknowledged that due to the Covid-19 pandemic, the carrier “may suffer for one to two years”, but beyond that, it should not be a problem. “Turkish Airlines will pick up the ones that suffer in the industry,” he said.

The TWF was established in 2016 as the national sovereign wealth fund and is chaired by Turkish President Recep Tayyip Erdogan. As of end-2018, it had US$223 billion in assets, including US$33 billion in equities.

According to Sonmez, the TWF will, among other initiatives, call for engineering, procurement and construction tenders this year for a coal-fired power plant in the south-eastern Afsin-Elbistan area with roughly a 1,600MW capacity. He said the plan is to break ground in the first half of 2021 (1H21), and that six Chinese companies had shown interest.

“We are focusing on the Chinese because they offer cost advantages and we have to be cost-efficient,” he said, adding that “we are not closing our doors to others”.

The fund is looking for foreign and local partners, and aims to hit US$100 billion (RM419.25 billion) in equity value by 2023.


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