Could sovereign wealth funds be a new source of financial optimism for Turkey?

Since the turn of the century, Sovereign Wealth Funds (SWFs) have proliferated thanks to a combination of surging energy prices and booming Asian exports. They are typically created when governments have a budgetary surplus and little or no international debt. Current holdings of almost $3 trillion will likely reach up to $12 trillion by 2015 thanks to the magic of compounding and the funds' new-found appreciation for equity investing.

The answer to the question of whether SWF’s are indeed a new cause for financial optimism for Turkey rests largely, in our view, in Turkey’s hands. There are investment opportunities in Turkey and the SWFs will continue to come if they are made welcome and Turkey’s inter-governmental relations with these funds’ capitals are effectively leveraged.

by Mehmet Öğütçü and Alastair Newton