The Russia-Turkey Investment Fund, set up last year by the Russian Direct Investment Fund (RDIF) and the Turkey Wealth Fund, aims to “strengthen bilateral economic ties and increase the investment flow between two countries,” according to the RDIF head.
The two sides will particularly focus on infrastructure construction, healthcare and information technology sectors, RDIF CEO Kirill Dmitriev told Turkey’s state-run Anadolu Agency.
“The fund will see the RDIF and the Turkey Wealth Fund invest $500 million each targeting the projects that strengthen trade, economic and investment ties between Russia and Turkey,” Dmitriev said.
“Sovereign wealth funds [SWFs] play an important role in providing capital to stimulate economic growth. By investing in existing and developing businesses and major infrastructure and social projects they can continue to have a positive effect on the local and global economies,” he added.
“SWFs also intensify mutual cooperation, acting as a sort of financial diplomat between countries, while economic ties help to further improve political relations between states,” Dmitriev said.
The RDIF was established in 2011 to co-invest alongside top global investors and act as a catalyst for direct investment in Russia. It has concluded more than 50 deals so far.
“The fund invested and committed for this purpose 1.2 trillion rubles [around $20 billion) and also attracted over $30 billion of foreign capital into the Russian economy through long-term strategic partnerships,” Dmitriev said.
“Currently, we have reserved capital of $10 billion under management and invested in 20 projects just last year.”
The controversial Turkey Wealth Fund was established in 2016 by combining the assets of a number of state-run companies. Officially it aims to develop Turkey’s strategic assets, increasing their value and providing funding for Turkey’s priority investments. Its portfolio – valued at around $40 billion – includes shares of some 15 giant companies from various sectors, but the fund has seen a number of setbacks since establishment and a lack of tangible achievements so far.
Partnership with Turkish companies
“The RDIF continues to explore and build new partnerships across the world and investing in the most promising sectors of the Russian economy, including technology sector which is now becoming an important area for the RDIF and its partners,” Dmitriev said.
He also stressed that the RDIF set up a number of new joint funds and platforms with partners from Israel, India, China, Vietnam, and Saudi Arabia among others last year.
Speaking about cooperation with Turkish companies and the RDIF, he said a number of joint projects are currently under development.
“For example, on the sidelines of a visit by Russian President Vladimir Putin to Turkey, the RDIF and a prominent Turkish construction company MAKYOL have agreed to form a partnership to jointly implement infrastructure projects,” Dmitriev said.
The RDIF head stated that the agreement foresees the joint implementation of investment projects in the infrastructure sector, including road construction.
“In 2014 the RDIF and Turkish construction firm Rönesans Holding – which has vast experience, expertise and technologies – also agreed to jointly invest $400 million in Russia,” Dmitriev said, adding that joint investments were channeled into healthcare, construction, real estate and infrastructure projects.