A deepening crisis has hit Turkey’s financial sector following a regulatory decision by the Capital Markets Board (SPK) to liquidate 131 investment funds managed by seven asset managers after they failed to meet investor redemption payments.
📌 Crisis Scale & Core Highlights:
- Massive Fund Expansion: Driven by investors seeking returns above high inflation and a depreciating lira, Turkey’s portfolio management assets surged to $329 billion by August 2026.
- Extreme Asset Concentration: Non-bank asset managers Tera Portfoy and Pusula Portfoy saw assets jump 10-fold ($14.3B) and 13-fold ($13.2B) respectively, each controlling over 4% of total market assets.
- Unprecedented Returns: Tera’s TLY hedge fund posted an extraordinary >15,000% cumulative lira return by September 2026, swelling to $5 billion in assets across 102,000+ investors before liquidation.
- Market Manipulation & Crackdown: Regulators cited market manipulation through low-liquidity small-cap shares to inflate fund returns. Investigations have implicated 217 suspects, with 56 individuals jailed pending trial (including former central bank and asset management executives).
- Market Fallout: The scandal dragged the Istanbul stock market into a bear market, recording its worst month since 2008 in September 2026.
⚙️ Liquidation & Compensation Plan: The SPK expects a 6-month liquidation process. Investors with net investments under 1 million lira (~$20,400) will be fully repaid, while larger investors will receive an initial interim payment of 1 million lira.