Country to get four-year $20 billion investment via Gulf fund, has potential to be ‘diamond in the rough’, firm’s CEO says
By Ovunc Kutlu and Gulbin Yildirim
NEW YORK (AA) – U.S.-based multinational alternative investment company National Standard Finance (NSF) will connect Turkey with a $2 trillion funding network that would bring foreign direct investment and help boost the economy, CEO Russell A. Duke told Anadolu Agency.
NSF has links to large foreign institutional and sovereign investors, and with its partners, it has engineered an initiative for Turkey to increase foreign investment and trade, Duke said.
Turkey will first get a four-year $20 billion investment via the soon-to-be-established Turkish Gulf Fund, which will act as the managing entity between investors, institutions and governments of Gulf Cooperation Council (GCC) and their Turkish counterparts to develop and invest in projects in Turkey, he explained.
“We feel confident that the Republic of Turkey has the opportunity to be a diamond in the rough to invest long term amongst emerging economies while also offering more attractive yields to investors than the majority of other global market in the current economic environment,” Duke said.
The fund will benefit Turkey in several ways, he said.
“Turkey’s big problem is that they don’t have liquidity. If you put this kind of liquidity into the market, these will make big movements in monetary system,” Duke said.
Secondly, the initiative and the fund will make western institutional and financial markets, and companies, more comfortable with the idea of investing in Turkey.
Thirdly, it will be beneficial to the appreciation of the Turkish lira.
“Once lira gets stronger, that’s going to be an indication that the economy will be more stable,” Duke said.
In 2015, Turkey’s trade deficit was $63 billion. The investment may also help close the gap in Turkey’s trade imbalance, Duke noted.
Turkish lira Wednesday fell to its all-time lowest against major currencies; the value of American dollar jumped to 3.94 against the lira. Duke said he believes this trend will be reversed in three to six months.
“It will be in a more manageable situation, back down to 3.40 range, and then there is a possibility to trend that down further over the next 18 months,” he explained.
Another way the initiative and Turkish Gulf Fund will be beneficial for Turkey is through strengthening its relations with GCC countries and the U.S.
“The long term political and economical stability of Turkey is also very important for the stability of the region as well and this is of significant value to us,” he added.
Duke said he believes that under the newly elected Donald Trump administration, strategic relations between the U.S. and Turkey will improve in the short and long term.
“A stronger relationship between the two countries will help to greatly mitigate political risk of doing business and making foreign direct investment in Turkey by institutional investors,” he added.
Foreign capital will be aimed towards infrastructure projects, as well as real estate, industrial, and energy related areas in Turkey.
Duke said NSF has already begun evaluating projects that have the potential to qualify and be structured for institutional capital from the international financial markets, and the Turkish Gulf Fund will act as the managing entity for each project.
“The timing for that is already underway to establish that … when the public money starts to be actually deployed, the deployment is going to depend on Turkey’s side of how these projects are ready to invest,” he added.