Turkey orders liquidation of 131 funds with 1 trillion lira in assets

4 billion) as of September 16, marking the biggest fund crisis in the country's capital markets history. The five largest funds account for nearly 70% of assets due to be liquidated, putting them under scrutiny as investors await clarity on potential recoveries. Here are the key figures, based on Reuters calculations using data from Turkey's electronic fund trading platform TEFAS: How Large Are The Funds? 3 trillion lira in assets on August 31.

Pusula Portfoy became the first asset manager to report a fund default on September 15, triggering wider concerns that culminated in the liquidation order. 5%. Tera Portfoy said after the close that two of its funds had also defaulted. 5 billion lira, or 21%, to 992 billion lira, reflecting investor redemptions and share price declines.

The SPK said last week that 455,758 individual investors had investments in the affected funds. How Are The Assets Distributed? Fifteen money market funds held 307 billion lira as of September 16, while the other 116 funds held 685 billion lira. Money market funds accounted for 31% of assets due to be liquidated, with equity and other funds making up 69%.

2% of all assets due to be liquidated. How Much Could Investors Recover? Investor recoveries will depend on the composition and liquidity of fund portfolios and the prices at which their assets can be sold. Money market funds generally invest in short-term, liquid securities with relatively low price volatility, meaning losses during liquidation would normally be expected to be more limited than for equity funds.

However, some money market funds facing liquidation have significant exposure to reverse repo transactions involving illiquid shares, potentially complicating recoveries. The outlook is more uncertain for equity funds. Some of the largest affected funds hold sizeable positions in thinly traded stocks, making it difficult to sell those holdings at current market prices without steep discounts. Industry experts said some assets could lose more than 90% of their stated value during liquidation if they cannot be sold near market prices.

Yeni Party lawmaker Umit Ozlale has said his party estimated that fund investors could recover "only around 10%" of their investments. How Big Is Tera's Share? 4 billion lira as of September 16, accounting for more than two-thirds of total affected assets. 1 billion-lira THF equity fund had 206,326 investors, the highest number among affected funds.

How Exposed Are Retail Investors? Funds accessible to retail investors held around 419 billion lira, while those restricted to qualified investors held about 574 billion lira, That means retail-accessible funds accounted for around 42% of assets due to be liquidated, compared with 58% for funds restricted to qualified investors. com;)