Seventh update in our series on the Turkish investment fund crisis. Only what is new this week, and our analysis.
What is new
Coordination at Vice President level. On 30 September a Fund Coordination Board chaired by the Vice President was created, and the State Supervisory Council (DDK) opened a review of recent fund transactions. The Capital Markets Board presented a payout roadmap: investors whose entitlement reconciliation (hak sahipliği mutabakatı) is complete will be paid according to each fund's assets and liquidity. No start date was given. Besides Katılımevim and Birevim, İktisat Katılım Bankası is also being transferred to state-owned Emlak Katılım.
Cancelled orders join the general queue. Per the regulator's clarification of 28 September, redemption orders cancelled on 17 September when the funds were closed on TEFAS will be paid from the liquidation balance pro rata to holdings. They have no priority.
The first default outside the funds. Hedef Holding failed to repay a 1.08 billion lira borrowing on the exchange money market due on 28 September. Reasons cited by the company: asset freezes on its controlling shareholder, inability to obtain support from partners, and the liquidation of funds they had invested in. The company has requested an extension. This is precisely the funding-chain risk we flagged in our fifth update.
The crisis reached pension funds. Between 11 and 29 September, the 311 open funds of the voluntary pension system (BES, on the BEFAS platform) saw net outflows of 6.67 billion lira, and their size fell by 74 billion to 1.82 trillion. Outflows were concentrated in voluntary funds outside auto-enrolment (minus 7.5 billion), while auto-enrolment funds saw inflows. Closed funds, available only to a provider's own clients, took in 11.1 billion: large savers are repositioning.
Sanctions widened. The regulator filed criminal complaints against 37 individuals over trading in Tera Finansal Yatırımlar Holding shares, imposed two-year trading bans on them and on two legal entities, and cancelled 24 licences. At the same time, prosecutors lifted some restrictions on certain companies and funds following a fresh assessment by the regulator.
Repentance money goes to the Treasury. A person named in a manipulation complaint can avoid prosecution by paying the Treasury twice the gain obtained (at least 500,000 lira) within 15 days. The first large payments have already been made. Important: this money goes to the budget, not to investors in the liquidating funds.
Markets and reserves. BIST 100 lost around 15% over the month and 6.8% over the week, falling below 12,300 intraday. The leasing and factoring index dropped 36% in a week. By press calculations, total company value fell by about 5.6 trillion lira between 16 and 29 September. By analysts' estimates, the central bank has sold around 9.4 billion dollars since the start of the month, and gross reserves have fallen to 171 billion.
One fund's timeline. Published data on the largest liquidating fund is telling: its unit was worth about 109 lira in January 2025 and 10,308 lira in September 2026, a rise of roughly 9,300%. Before opening to the wider market it had 161 investors; by the end of August 2026 it had 111,000, with assets of 269 billion lira. The regulator identified problems in the fourth quarter of 2025, yet while new rules were being drafted, the fund's investor base grew many times over.
Our analysis
The state has taken over the process, but not shortened the horizon. Coordination at Vice President level and the involvement of the DDK will speed decisions and remove inter-agency friction. But without a payout start date, the working planning horizon stays where it was: up to six months.
Two-speed recovery is now official policy. The phrase "according to each fund's assets and liquidity" directly confirms what we wrote earlier: transparent funds pay first, scheme funds later and less. The key condition for every investor is a completed entitlement reconciliation. Without it, there is no place in the payout queue.
A new contagion channel: household savings. The pension outflows look like people with frozen fund units trying to cover cash gaps. It is an expensive route: early exit from BES typically means losing part of the state contribution and paying withholding tax on returns.
The funding chain has started to break. The Hedef Holding default is the first real default outside the funds themselves. Groups whose assets are frozen will struggle to service debt, which creates new risk for their counterparties: suppliers, lenders and holders of their bonds.
Penalties do not compensate losses. Repentance money goes to the budget. Investor recovery depends solely on realising the funds' own assets; do not count on compensation from penalties.
The signals were visible in advance. A 9,300% rise in a unit price over a year and a half is not a find, it is a warning. The only protection an investor has is their own check of whether returns are explained by the portfolio, not the expectation that a regulator will stop the process in time.
What to do now
Holders of frozen units: confirm with your broker that the entitlement reconciliation on your account is complete, and that any redemption order cancelled on 17 September has been recorded. Do not cover a cash gap by exiting BES early without calculating the loss.
Companies: check exposure to groups under asset freezes (receivables, loans, bonds, guarantees).
Those with both capital and business entirely in Türkiye: this week delivered another argument for a second pillar for holding assets.
Holding frozen units, receivables from affected groups, or questions about your capital structure? Contact us.