One of Turkey's largest money-market funds defaulted on redemption payments
In Turkey, Tera Portföy's TP2 money-market fund — 167,000 investors and 224.4 billion lira in net assets on 16 September — and its THF equity fund defaulted on redemption payments, while six hedge funds extended their redemption terms. They came six days after Tera said it had agreed the basic terms to acquire Pusula Finans Holding, whose fund manager later disclosed redemption defaults of its own.
Economics & Markets··Night
Two funds default in Turkey
Tera Portföy Yönetimi filed two notices with Turkey's public disclosure platform on the evening of 16 September: a unit-redemption default in the TP2 money-market fund, and seven minutes later another in the THF equity fund.[1], [2]
The scale is not small. At the 16 September close TP2 carried 167,000 investors and 224.4 billion lira in net assets — and that is one fund of the manager's, not its whole book; Tera Portföy has other funds trading on TEFAS. Money-market funds are held in Turkey as a substitute for cash.[8], [2]
A default by itself is neither failure nor loss: it is a payment not made on time after a sell order. In practice the investor is not written off, but does not know when the cash arrives.[2]
Exit terms changed the same day in six hedge funds. In TLY, DOH, TMV, TMM, TRU and T3B the unit price is struck monthly and proceeds paid on the tenth business day, for orders placed after 13:31 on 16 September. An investor selling mid-month may wait more than a month for the money.[2]
The chain from Pusula to Tera
The default did not arrive alone. On 9 September it was announced that talks had begun for Tera Grubu companies to acquire Pusula Finans Holding and its affiliates; on 10 September the parties reported agreement on the basic commercial and financial terms.[6]
Two days later the picture reversed. An Istanbul prosecutor issued an arrest warrant for Pusula Portföy chairman Muhammet Yarız. Sözcü, citing its own writer İsmail Saymaz, reported allegations that Yarız had left his phone at the office and departed Marmaris by boat. Serdar Turhan of Katılımevim was barred from travelling abroad.[6], [7]
Yarız said on 12 September that he had gone to the Bodrum prosecutor's office to testify; the court he was sent to ordered his arrest. Turhan and Ahmet Özcan resigned from both boards, and Tera's founder Emre Tezmen took the seats they vacated.[7]
Pusula Portföy disclosed that some of its own funds had defaulted on redemption payments. No binding contract for the transfer had been signed. Six days after saying it had agreed the basic terms, Tera filed the same sentence for two funds of its own.[7], [6], [1]
A structure flagged since April
None of this was newly noticed. On 24 April Bloomberg examined Tera Yatırım's shares, up about 40,000% since their 2022 listing: a firm with roughly 130 employees carried a $4.5 billion market value, and its flagship $2.7 billion fund had returned more than 1,500% in a year. The fund poured money into a tight circle of related companies and amplified the bets with borrowed cash.[3]
Orkun Saka of City St George's, University of London described the mechanism: the fund's purchases push up affiliated share prices, which inflates its net asset value, which makes the fund management business look more valuable, which lifts the parent's earnings and stock. “This loop is self-reinforcing by construction.” Tezmen rejected the criticism.[3]
The regulator had already touched this structure. After Tera's brokerage arranged a Visne Madencilik listing that left only 21% in public hands, the stock rose more than 2,100% by the end of July; Tera's main fund and brokerage sold their IPO shares that month and the stock fell 75% in August. The Capital Markets Board fined two Tera fund managers 8.9 million lira each for creating a “misleading perception on the price, supply and demand”.[3]
The warning reached the institutional side too. In its late-June review MSCI said it had been told of recurring possible coordinated trading in shares held by funds tied to small listed companies, inflating free-float estimates, and in July said it could reclassify such stakes as outside the free float, and could open a consultation without concrete progress by its November review.[4]
In August fund managers pressed the regulator for tougher measures. At the centre of their concern were funds producing unusually high and persistent returns on prices they believed were widely manipulated, drawing thousands of investors in. MSCI and S&P Dow Jones had both raised concerns about transparency and market accessibility, and MSCI said insufficient progress could trigger a consultation on the treatment of Turkey and its eligible securities.[5], [4]
