Turkish Funds With $7.5 Billion Assets Default on Redemption Requests

A Turkish fund Tera Portfov Yonetimi AS, with a combined 366 billion liras ($7.5 billion) in assets failed to meet redemption requests, making it the second Turkish asset manager to announce defaults on some funds this week.

Defaults have occurred in redemption payments for Tera Portfoy Money Market Fund (TP2) and Tera Portfoy Equity Intensive Fund (THF), the Turkish asset manager said in two separate filings to Borsa Istanbul.

Tera’s funds have attracted large inflows after posting some of the highest returns in the country’s investment-fund market in recent years.

The announcement came a day after another fund, Pusula Portfov Yonetimi AS, said some of its investment and money market funds were unable to meet withdrawals, fueling a rout in Turkish stocks.

The Borsa Istanbul 100 Index fell as much as 7.7% on Wednesday, triggering a market-wide circuit breaker, before paring losses to close 5.5% lower. It was the benchmark’s biggest two-day decline since March 2025.

Tera said defaults occurred in redemption payments for its Money Market Fund and Equity Intensive Fund, with portfolios of 224 billion liras and 142 billion liras, respectively. The firm said reconciliation with brokerage firms and its liquidity-management process were ongoing.

Tera had become a focal point for concerns over the risks created by funds building large, concentrated positions in relatively illiquid Turkish stocks. The firm’s main investment funds have gained a cult following on social media for their astronomical returns, achieved by pouring billions of lira into a tight circle of related companies.

Tera Chairman Emre Tezmen said the firm was facing an “extraordinary and unprecedented” speculative attack that risked spreading across the markets, in a post on X.