Update as of 21 September 2026 to our review of the Turkish investment fund crisis.
What is new
The liquidation now has a mechanism and a deadline. The Capital Markets Board (SPK) appointed two banks as executors: İş Bankası handles the Tera funds, Ziraat Bankası the other six firms. Assets move to Takasbank custody, reconciliation within 10 business days, sales paced to market depth, cash distributed to investors in tranches pro rata to their holdings. Target horizon three months, extendable. Redemptions through any channel are closed; orders placed after 17 September 13:30 join the general queue.
The scale is now precise: 131 funds in liquidation, 984.8 billion lira (about 20.5 billion dollars), 732,600 investors. The Finance Ministry puts the troubled segment at 10-11% of the fund market, with 90% operating normally. Additional measures prepared for Thursday were not needed.
MSCI repeated its warning on 19 September, in the middle of the crisis: without progress on free float and ownership transparency before the November index review, a formal consultation on Türkiye's index status will be launched.
The investigation widened: executives of four groups (Pusula, Tera, Hedef/Info, Destek) detained, some remanded in custody, travel bans and asset freezes imposed. Prosecutors requested from the financial crimes unit (MASAK) all foreign money and crypto transfers by these executives since 2024.
The seven firms are not alike. One disclosed its portfolio: 55% in cash, 84% liquid within a day, no share repo, no borrowing. The regulator meanwhile warned that assets of the scheme funds will sell below book value.
Our analysis
What changed in the assessment: not severity, but certainty. A week ago the main risk for unit holders was the unknown: frozen, no timeline. Now there are executors, a procedure and a three-month horizon. That moves the situation from "unpredictable" to "unpleasant but calculable." For a client's liquidity planning, that is a fundamental difference.
Recovery will run at two speeds. Investors in transparent funds will receive money in the first tranches, nearly in full. Investors in scheme funds will wait until the end of the period and receive less than the last unit value, because low-free-float shares in liquidation sell at bid, not at the last quote. It makes sense to classify your units by this criterion now and not expect a uniform outcome across the seven.
A fund's risk rating does not protect you. A money market fund rated 2 out of 7 defaulted on redemptions. The risk scale measures price volatility, not the ability to return cash. After September, the only working criterion for choosing a manager is whether the returns are explained by the portfolio's contents and the absence of related-party dealings.
Crypto is inside the investigation perimeter alongside bank transfers. The prosecutors' request to MASAK for executives' foreign crypto transfers since 2024 is a signal beyond one case: Turkish authorities treat crypto assets as a traceable channel and will pull two years of history. For clients with crypto flows through Türkiye, that is an argument for a clean, documented trail, not for anonymity.
The main risk has moved to November. MSCI repeating its warning two days after the crash means the regulatory clean-up did not, by itself, convince the index provider. A consultation on Türkiye's status would hit portfolio inflows harder than the September shock, and would affect not 10% of the fund market but the whole exchange and the lira. That is now the key date on the calendar, not the liquidation.
What did not change. Banks stayed outside the problem and became its solution: they are the liquidation executors. Deposits, brokerage accounts and bank-affiliated funds, operating businesses and real estate are untouched. An emergency withdrawal from Turkish banks still makes no sense and will only attract extra compliance scrutiny.
What to do now
Holders of frozen units: sort them into two baskets (transparent and scheme), follow the KAP pages of your funds, tranches will arrive in your account without any application. Everyone else: confirm you have no exposure, avoid sudden moves, prepare for November as the key date of the quarter. Those with both capital and business entirely in Türkiye: September delivered a concrete argument for a second pillar for holding assets.
Holding units in Turkish funds, or questions about your capital structure? Contact us.