The credit rating agency Fitch announced Tuesday it upgraded Türkiye Wealth Fund's (TWF) rating to "B+" and its outlook to positive in a move that followed the historic revision of the country's rating to "B+" earlier this month.

The fund's previous rating was "B," the credit rating agency recalled in a statement.

The rating agency cited several drivers behind the upgrade, including consideration "that extraordinary support from the Turkish government to the TWF would be 'Virtually Certain' in case of need," decision-making and oversight being "very strong," "TWF's strategic importance for the national government's long-term economic agenda" and its recent inaugural $500 million bond issuance.

"TWF's highly strategic public policy role was demonstrated by the improvement of core capital adequacy ratios of key state-owned banks in TWF's portfolio by injecting a total of TL 184.2 billion (around $9.6 billion as of March 2023), consolidation of state-owned insurance and pension companies in 2020-2022 to create a regional leader in the sector," Fitch said in the report.

"TWF's acquisitions consist of controlling equity stakes in the technology and telco sector such as Turkcell Iletişim Hizmetleri A.S. (26.2%) and Turk Telekomünikasyon A.S. (55%) for economies of scale of key strategic assets. TWF has also made investments in the real estate sector to create an international financial hub (Istanbul Finance Center)," it added.

The Türkiye Wealth Fund is the strategic investment arm and the equity solutions provider of the Republic of Türkiye. It is an asset-backed development fund that focuses on the growth targets of its portfolio companies through value-creation programs, investments in key sectors and visionary projects to support the economic development in the country.

TWF has 30 companies, two licenses and real estate in seven sectors in its portfolio.

Fitch raised Türkiye's rating to "B+" from "B" early in March and revised its outlook to positive from stable saying the move "reflects increased confidence in the durability and effectiveness" of policies implemented since the pivot after last year's May elections, including greater-than-expected frontloading of monetary policy, in reducing macroeconomic and external vulnerabilities.