Your Exit Right Is Only as Strong as the Liquidity Behind It
On the evening of September 17 one of the biggest Turkish fund managers rewrote the terms of its investors exit: They can no longer sell on any day.
From now on there is one price per month, and the cash arrives about two weeks after that.
The fund was TLY, run by Tera Portföy, with 102,616 investors and about 243.6 billion lira (roughly $5 billion) in assets.
The next day, Turkey's Capital Markets Board (SPK) ordered the liquidation of 131 funds run by 7 managers holding more than 890 billion lira, roughly $18.3 billion.
From New Rules to Liquidation in 3 Weeks
The funds drew investors with returns well above inflation and deposit rates, in an economy where tight monetary policy had made lira savings the priority. TLY reported a 747% return from January to July 2025 while it had fewer than 200 investors, then it opened itself to a much wider pool.
Many of these funds held shares of small and recently listed companies. In such stocks, even modest buying can lift the price significantly . When a fund owns a large part of a thinly traded company, it values that holding at the market price, so any rise in that price lifts the fund’s reported daily return.
In November 2025, Finance Minister Mehmet Şimşek said that manipulation was being carried out through certain funds.
Nine months later, in late August 2026, the SPK capped how much of a single company a fund could hold. Investors, which were getting a sense of the market sentiment, began pulling money out of TLY.
By Ekonomim’s calculation from public TEFAS data, about 59.6 billion lira (roughly $1.2 billion) left the fund between August 28 and September 16. On the evening of September 17, Tera Portföy announced that it could not pay redemption requests.
Two of Turkey's biggest banks: Isbank and Ziraat Bank, are now selling the funds’ holdings to turn them into cash. On October 1, the SPK approved a first payment of up to TL 1 million (about $20,400) per investor, starting with money market funds. For positions above that amount, the first payment is only part of the money owed. The remainder will come from selling the funds’ holdings. For many of those holdings no buyer has appeared yet, so it is still unknown how much they will bring in.
Investors who sold before the freeze have also been invited to return gains that officials call excessive, through voluntary accounts opened by the Savings Deposit Insurance Fund. The liquidation is expected to take at least six months
Why This Keeps Happening
A redemption right is a promise about the future made against assets held in the present.
A fund that offers daily redemptions while holding thinly traded shares is trying to run two clocks at different speeds: investors can leave in a day, but the portfolio needs weeks to sell.
In calm periods few investors use that right so the gap stays invisible. When many use it in the same week the fast clock meets the slow one, and the following happens: New pricing dates, longer payment windows and a long queue.
Every investor holds the same right on paper, but collectively they cannot exercise it. Position in the line decides who is paid first. In this case, orders submitted before the freeze receive priority. Investors who sold earlier left with their capital, and those who stayed now wait for asset sales.
Whoever Sets the Terms, Can Change Them
Investors usually confirm that a redemption right appears in the documents. A few of them ask what can change once many investors use it. The Turkish case shows the answer to that question:
● Who controls the terms. The manager can change pricing dates and payment windows. At Tera Portföy, both changed in one evening.
● Who sets the price. The funds holdings were valued in a market the funds themselves dominated so those prices reflect the funds own presence. A real price appears only when independent buyers arrive, and the liquidation has now reached that stage.
● How much comes back first. Every eligible investor receives the same maximum: TL 1 million, about $20,400. Smaller positions are reported to be repaid in full, larger ones receive TL 1 million now and wait for the rest. For an investor with $10 million in the fund, that is about 0.2% of the money.
The Takeaway
Whatever the investigations conclude, the structural lesson stays: An exit right needs to be tested before the first wire with three questions.
1. Who can change the redemption terms (pricing frequency and payment window), and on what notice?
2. What would the portfolio realistically sell for within the redemption window and who sets today's prices?
3. Where does your claim rank in a queue: If many investors exit at once, how much of your money comes back first and is there any cap limit for large positions?
In the Zero Trust Capital approach, the exit is tested in the documents and in the mechanics: independent custody and pre-cleared routing. This way the exit does not depend on the goodwill of the party managing the capital.
No review can guarantee how a specific case would have ended. However, It can remove the condition in which nobody outside the structure tested it at all.
If you'd like a review of your own setup, reach out and we'll set up a call.
