Turkey's largest asset owners dodge fund scandal
Last month the Turkish market authority ordered the liquidation of more than 130 investment funds over what has been described as “Ponzi-like” activity. Have any of Turkey’s largest asset owners been affected? (David Lombeida/Bloomberg)
Those who have been following financial news in recent weeks will already be aware of the ongoing turmoil on Turkish capital markets.
Last month the Turkish market authority ordered the liquidation of more than 130 investment funds operated by seven asset managers, dismantling what justice minister Akın Gürlek described as “Ponzi-like schemes”.
The liquidated funds are estimated to have about $17bn of investments made by 300,000 investors.
Since then the government has sought to reassure investors that their efforts to contain the fallout from the collapse of a speculative bubble on the Istanbul stock exchange have been successful. Turkey's central bank has provided banks with liquidity support.
“We acted very quickly... Our aim here was to prevent the contagion from spreading to the rest of the system, and we believe we have largely succeeded in this,” treasury and finance minister, Mehmet Şimşek, was recently cited as saying by the state-run news agency.
But what about the country’s main asset owners? Well, they may have weathered the storm without taking a hit.
The $258bn Turkïye Wealth Fund told AOX “the recent developments have had no impact on TWF's financial position or operations”.
“The fund remains focused on executing its mandate and advancing its strategic priorities in the normal course of business,” according to TWF.
The asset owner noted that it “has not invested in any of the funds currently referred to in the public domain and has no exposure to or connection with the frozen funds in question”.
Another of the country’s large asset owners, the $33bn Armed Forces Pension Fund, or OYAK, also appears to have been spared from damage, with regulatory filings indicating that the asset owner did not have direct exposure to the funds.
OYAK did not respond to AOX’s request for comment.