RDIF creates joint fund with Turkish SWF

The Russia-Turkey Investment Fund, which could be as large as $1bn, will ‘strengthen bilateral economic ties’ between the two countries.

The Russian Direct Investment Fund (RDIF), a $10 billion fund set up by the Russian government to invest in Russian projects and secure co-investments from foreign investors, has signed a memorandum with newly-formed Turkish sovereign wealth fund Türkiye Wealth Fund (TWF) establishing a fund that could be as large as $1 billion.

RDIF and TWF will each invest up to $500 million in the Russia-Turkey Investment Fund, which aims to strengthen bilateral economic ties and increase investment flows between Russian and Turkey.

TWF was set up in 2016 with the aim of developing Turkey’s strategic assets, growing their value and thereby providing funding for further investments.

The Russia-Turkey Investment Fund will target investments in agriculture, healthcare and projects implemented by Turkish companies in Russia. In a statement, RDIF chief executive Kirill Dmitriev said the two parties are “already in talks on a number of potential joint investment projects”.

“Türkiye Wealth Fund and the Russian Direct Investment Fund will contribute to the growth and prosperity of their economies and will pursue mutually profitable investment opportunities both in Turkey and in Russia,” TWF chairman and chief executive officer Mehmet Boston said in the statement.

“We are also excited that this will be one of the first international initiatives of the newly established Türkiye Wealth Fund. We hope that it will be the first step towards a long lasting relationship between two institutions.”

RDIF has created similar tie-ups with sovereign wealth funds in other countries. In 2014 it formed the Russia-China Investment Fund, a $2 billion fund, with the China Investment Corporation (CIC). Last month the RCIF made its first partial exit, selling a portion of its stake in Russian children’s goods retailer Detsky Mir through a listing on the Moscow Exchange, the first major IPO in Russia since 2014.

In December last year RDIF teamed up with the Japan Bank for International Cooperation to establish a $1 billion Russia-Japan Investment Fund. Each party agreed to commit $500 million to facilitate investment and economic connection between Japan and Russia.

Among RDIF’s other tie-ups are the Russian-Korean Investment Platform with the Korea Investment Corporation, the Russia-France Investment Fund with Caisse des Dépôts International, the Russian-Vietnamese Investment Platform with the Vietnamese State Capital Investment Corporation, and a $2 billion co-investment fund launched with Abu Dhabi’s Mubadala Development Company.