Did the fund crisis come in plain sight? Who won while the house was winning, and who will pay the bill?

The fund crisis on Turkey's agenda is not just a matter of hundreds of billions of liras in financial scale or hundreds of thousands of investors; it is a serious test of confidence that calls into question the functioning of the market, the effectiveness of supervision, and how gains and losses are shared among whom. The difference between the wealth appearing on the screen and the value that can actually be converted into cash constitutes the most critical point of the debate. This is where the real questions begin: How did this system grow so large, who won while it was rising, why couldn't the risks be limited in time, and who will pay the bill in the end?

With the decisions of the Capital Markets Board (SPK) dated September 17, 2026, it was decided to liquidate 131 funds belonging to seven portfolio management companies. In a statement made on September 23, the SPK announced that the number of individual investors in these funds was 455,758.

The figures regarding the size of the money vary according to the date and valuation. While Reuters reported the size of the assets covered by the decision as approximately 891 billion TL on September 17, when the decision was taken, subsequent studies compiling TEFAS data calculated a total of approximately 765.2 billion TL as of September 21. These figures, which reflect market values on different dates, should not be read as direct alternatives to each other.

What makes the debate even more important are the allegations that some large investors reduced their positions by taking advantage of high returns before the crisis, and that there were connections between fund managers and political or bureaucratic circles. These cannot be turned into a definitive judgment without being revealed through legal processes and concrete data. However, the nature of the allegations makes it necessary to transparently investigate who bought and sold when, who benefited from extraordinary returns, and whether any potential relationships existed. Because the issue is not just the financial loss suffered by investors; it is the trust placed in capital markets and the institutions tasked with supervising them.

FROM EARLY WARNING TO DEFAULT: The Step-by-Step Anatomy of the Fund Crisis

It would be incomplete to view what happened only as a problem of some funds, portfolio management companies, or investors. The issue has turned into a broader market confidence problem ranging from price formation to liquidity and leverage risks, and from transactions between funds to the effectiveness of regulatory oversight.

For this reason, it is necessary to look not only at what happened today, but also at when the risk emerged, when it was noticed, and why the intervention was delayed until this stage.

Warnings Were Not New: The problem did not emerge overnight. Minister of Treasury and Finance Mehmet Şimşek announced in a broadcast he attended in November 2025 that they were aware that manipulation was being carried out through some funds, that they were aware of the need for regulation, and that they would increase the fight against it.

In June 2026, MSCI brought to the agenda concerns regarding price movements in some companies in the Turkish market, especially those with small scale and low liquidity. (However, the failure to fully suppress the early warning signals given by MSCI in time multiplied the operational cost for regulators, leading to the quarantine of 131 funds all at once.)

Subsequently, the exclusion of Tera Yatırım (TERA) and Tera Finansal Yatırımlar (TRHOL) shares, which were previously announced to be included in the index, eliminated the expected foreign demand and increased the selling pressure on these shares.

The SPK later imposed restrictions on the positions that funds could take in shares with low actual free float. However, another vulnerability became visible this time: It was not easy to unwind concentrated and low-liquidity portfolios that fueled high returns during the rise without distorting prices.

September 14–16: The Liquidity Crisis Became Visible: In mid-September, the increasing exit demands of investors revealed the liquidity problem in some funds. In particular, there was intense selling and demand for conversion to cash in TERA funds on September 14–16. While the demands of September 14 and 15 were met, the default announcement came on the evening of September 16.

The fact that losses in some share-intensive and variable funds, which had provided extraordinary returns until shortly before, reached approximately 85 percent showed how quickly the mechanism fueling the rise could reverse.

Exit demand triggered the need for sales, sales triggered price drops, price drops triggered collateral and liquidity problems; and these triggered new exits. Thus, a liquidity problem turned into a self-feeding price–sale–liquidity spiral.

PONZI OR A SELF-FEEDING PRICE CYCLE?

The term "Ponzi" is frequently used for what has happened in recent days. However, it would not be correct to reach such a definitive judgment before legal and administrative processes are completed. In a classic Ponzi scheme, payments are made to previous investors with the money of new investors, and the system survives as long as new money inflow continues. Here, there are real companies, shares, and legally defined investment funds. Therefore, what should be discussed is not whether the structure is directly a Ponzi; it is whether some mechanisms produce a cycle that resembles a Ponzi effect.

Extraordinary returns attract new investors; as the incoming money is directed to the same or similar shares, prices rise. Price increases make the fund return look more attractive, and high returns accelerate new money inflow. Thus, the system can fuel its own rise as long as market conditions permit. However, when money inflow slows down and investor exit begins, the same mechanism works in reverse. Funds turn to sales to create cash; sales lower prices, fund values decline, and new exit demands may arise. The cycle that accelerates the rise turns into a mechanism that accelerates the decline this time.

For this reason, the real issue should not be stuck in the "Is it a Ponzi or not?" debate. There are more fundamental questions that need to be asked: What was the source of the high return? To what extent did new money inflows fuel prices? How far did prices move away from the economic realities of the companies? Because high return alone is not a crime. However, if the source of the return cannot be explained by economic fundamentals, prices are detached from their real values, or the risk undertaken is not correctly conveyed to the investor, we are talking about a structure that goes beyond an ordinary investment loss.

PRICE IS ONE THING, VALUE IS ANOTHER: Where Does the Real Balance Sheet Emerge?

When we talk about the size of an investment fund, what are we actually measuring? The real money investors put into the fund, the market value of the assets on hand that day, or the paper wealth that includes gains that have not yet been converted into sales?

This distinction is the key to understanding what happened. Let's give a simple example. Let's assume a fund holds 10 million shares and the last transaction price of the share is 100 liras. On paper, this position is worth 1 billion liras. However, if there are not enough buyers at the same price when the fund wants to sell all the shares, the sales will pull the price down. Therefore, the portfolio value calculated over the last transaction price and the value that the portfolio can actually be converted into cash may not be the same.

This difference grows, especially in shares with low actual free float and limited market depth. The fact that funds take large positions in these shares can narrow the supply; prices rising with limited transactions can increase the fund return. The direction of new investors who see the high return to the fund and the transfer of the incoming money back to the same or similar assets can create a self-feeding cycle after a while.

It is right here that the fundamental question arises: Does the resulting wealth increase create a new economic value, or does it stem from the rise in the price of existing assets?

If a company increases its production, sales, investments, and profitability, there is an economic equivalent to the rise in its market value. However, if the share price is multiplying without a similar improvement in basic indicators, it is necessary to question the dynamics with which the price is formed.

Indeed, the SPK also announced that price movements that are difficult to explain with the economic reality and basic financial indicators of companies were observed in some shares with low actual free float; and that practices allowing for "fictitious" calculations in some fund valuations were changed in July 2026.

The term "fictitious value" here does not mean that there is no real asset. The share, the fund, and the company are all real. The real issue is whether all of the value appearing on the screen can be converted into money at the same price.

For this reason, to see the real financial picture, it is necessary to separate four figures: Net money entering the fund, current portfolio value, unrealized gain, and real cash to be obtained at the end of liquidation.

THE ILLUSION OF SCALE: What Does 765 Billion Liras Mean?

We are talking about hundreds of billions of liras. However, as the figure grows, it becomes difficult to grasp its equivalent in real life.

Let's concretize approximately 765.2 billion TL just to see the scale. The net minimum wage for 2026 is 28,075.50 TL. This amount corresponds to the annual net wage of approximately 2 million 271 thousand minimum wage earners.

When viewed through the lowest pension, which was increased to 23,552 TL as of July 2026, it corresponds to the annual pension of approximately 2 million 707 thousand retirees.

When compared with local government budgets, the scale is also striking. We are talking about 39 times the 19.5 billion TL 2026 expenditure budget of the Tekirdağ Metropolitan Municipality, and approximately 22 times the 35 billion TL budget of the Adana Metropolitan Municipality.

The purpose of these comparisons is not to dramatize the figure, but to make its magnitude understandable.

However, we must make a critical distinction here: 765 billion liras is not lost money.

This figure represents the approximate market size of the funds on a certain date. The actual amount to be obtained at the end of the liquidation will vary depending on the prices at which the assets can be converted into cash and under what market conditions. The reason why the SPK extended some liquidation periods, which were initially set as three months, to six months is also so that the assets can be sold under the most favorable conditions possible, taking market conditions into account.

Therefore, the issue at the center of the debate is not whether 765 billion liras "disappeared"; it is how much the difference between the value appearing on paper and the real money that will enter the treasury at the end of the liquidation will be.

WHAT DID THE WORLD PRESS SEE? Concentration, Leverage, and Liquidity Risk

The process leading to the liquidation of 131 funds in Turkey also entered the agenda of the international financial press. The Financial Times (FT) and Wall Street Journal (WSJ) handled what happened not just as a local market tremor; but as an example of financial fragility where concentration, leverage, and liquidity risks became visible at the same time. Bloomberg reported that a pool of assets is planned to be created in order to make repayments to the investors of the liquidated funds.

WSJ: Concentration And Illiquid Share Risk: The WSJ draws attention to the new Fund Guide published by the SPK on August 28 as one of the important turning points of the crisis.

According to the newspaper, some portfolio management companies concentrated on the shares of companies with high market value but low actual free float. The fact that prices rose rapidly in these shares with limited liquidity, also due to the effect of transactions between funds, carried the paper returns of the funds to extraordinary levels.

However, the mechanism reversed when the SPK restricted the positions that free funds could take in companies with low actual free float. Sales that started to comply with the new rules increased the liquidity problem when enough buyers could not be found.

The concentration that fueled the return during the rise turned into a mechanism that accelerated selling pressure and exit from funds when the decline began.

FT: Leverage And Liquidity Spiral: The FT places the leveraged financing mechanism at the center of the crisis. According to the newspaper's analysis, funds were borrowing from repo markets by showing rapidly appreciating shares as collateral; and reinvesting in similar shares with the obtained resources to grow their positions.

While this mechanism multiplied the return in a rising market, it began to work in reverse as exit demands increased. Sales made to create cash pulled down the prices of shares with low liquidity; the decline in collateral values created a need for new sales.

Thus, a spiral emerged where leverage, price decline, and liquidity crunch fed each other.

The FT also evaluates the Turkish example within a broader global risk debate. By drawing attention to the increasing weight of retail investors and high leverage levels in US markets, it emphasizes how quickly similar structures can become fragile when market conditions reverse.

Common Point: Trust and Supervision: Although the analyses of the FT and WSJ highlight different mechanisms, the point they agree on is the same: market confidence and regulatory oversight.

What happened reminds us of an important financial truth once again: When concentration in assets with limited liquidity, high leverage, and mutual transactions combine in the same structure, the mechanisms that accelerate the rise can also accelerate the decline when the market reverses.

The real risk emerges here: Vulnerabilities that are not visible while prices are rising become visible at the same time when trust is shaken.

TRACING THE EXPERIENCE: What Does the Past Tell Us?

Turkey's financial memory is full of examples showing that there can be large differences between the balance sheet appearing on paper and the real cost that emerges in the end: The Bankers' Crisis, the 2001 banking crisis, banks transferred to the SDIF (TMSF), and İmar Bankası…

Of course, it would not be correct to put today's fund crisis in the same category as these examples. Financial instruments, legal structures, and operations are different from each other. However, there is a common lesson to be learned from the past: The first balance sheet announced by a financial structure is not the final economic cost.

The İmar Bankası example is instructive in this respect. The difference between the liabilities reflected in official records and the picture that emerged in subsequent examinations showed the importance of examining retroactive records and money movements. It cannot be concluded from this that a similar system exists in today's funds; there is no such finding.

However, the lesson to be learned is clear: A real balance sheet cannot be drawn up without revealing how much money actually entered the system, how much of it left, how much of the value on paper turned into realized gain, and how much of it can be collected at the end of the liquidation.

For this reason, the first thing that needs to be done today is clear: Trace the money.

WHO WON, WHO LOST? Tracing the Money

It would be incomplete to read a financial crisis only through the investors who lost in the end. Because someone won while the system was growing.

Who entered the funds that provided returns above normal market conditions early? Who benefited from high returns for a long time? Were there those who reduced their positions just before the crisis? Were there remarkable relationships between the partnership structures of the funds and the companies or the real beneficiaries?

These questions cannot be answered with guesses or by accusing people by name. When ownership records in the Central Registry Agency (MKK), Takasbank movements, SPK transaction data, MASAK money flows, and tax records are examined together, a comprehensive financial map that traces the money backwards can be drawn.

The goal here is not just to determine whether there is an unlawful transaction. It is also to reveal among whom and how the economic result is distributed.

Because if high returns are concentrated in certain segments, and the loss is spread to a wider investor base or the public when the system dissolves, the issue goes beyond just investment risk and turns into a wealth transfer debate.

For this reason, the question needs to be asked in two directions: Who got rich while the system was rising, who got poor while the system was declining?

DID THE INVESTOR TAKE THE RISK, OR DID THE SYSTEM PRODUCE THE RISK?

It would also be simplistic to put the entire bill on the investor.

Turkey has been going through an economic environment where high inflation, loss of income, and concerns about the erosion of savings have been experienced for a long time. For this reason, it is not correct to explain the search for high returns only through "the desire to make easy money" or "greed."

Because sometimes a person takes risks not to get rich, but not to get poor.

Of course, a continuously high return that is far above market conditions should be a warning sign for the investor. Financial literacy gains importance right here. The investor should question not only the past return; but also at the cost of which concentration, liquidity, and loss risk that return was obtained.

However, the responsibility of the investor and the responsibility of the regulatory authority should not be confused. When a saver entrusts their money to a professional portfolio management company in a regulated market, they do not expect their gain to be guaranteed, but that the game is played according to the rules.

It is possible to summarize this expectation in one sentence: "The state does not guarantee my gain; but it supervises whether the game is played according to the rules."

This is exactly where trust in capital markets begins.

THE REAL TEST OF SUPERVISION: Managing the Crisis, Not Preventing It

According to the SPK's own statement, some problematic behaviors were observed in the last quarter of 2025, the issue was brought to the agenda of the Financial Stability Committee on December 2, 2025, various regulations were made throughout 2026, and the Guide on Investment Funds was updated on August 28, 2026.

This chronology inevitably brings up the following question: If the risk was seen, why couldn't it be limited earlier and more effectively?

Financial markets are now too fast and complex to be supervised with the methods of the past. While fund structures, algorithmic transactions, leverage, and capital movements are constantly changing, supervision cannot be a mechanism that only comes into play after a problem arises.

The knowledge and speed of the supervisory institution cannot remain behind the market it supervises. The essential thing is not only to examine completed transactions, but to see in advance where the risk is growing. Today, thanks to big data, algorithmic surveillance, and artificial intelligence, extraordinary fund returns, rapid portfolio growth, concentration in shares with low actual free float, related investor clusters, and abnormal price movements can be monitored in near real-time.

However, technology alone is not the solution. It also requires expert staff, institutional memory, continuous training, professional merit, and independent decision-making capacity that can use it with the right questions. Because the success of regulatory institutions should not be measured by how many funds they liquidated after a crisis broke out; but by how many risks they were able to see and limit before they turned into a crisis.

THE REAL RISK: Trust in Turkey Capital Markets

The issue also has an international dimension. What needs to be protected is not only the investor, but the reliability of Turkey's capital markets. In its market accessibility assessment in June 2026, MSCI drew attention to investor concerns regarding the determination of the real actual free float and the reliability of market prices, especially in some small-scale companies in Turkey; it stated that such problems could distort price formation and increase volatility.

For the foreign investor, the issue is not just how much money is made or lost. There are more fundamental questions: Is the price I see really the price formed in the market? Is the actual free float as it appears? Can I exit the market at a fair price whenever I want?

When trust in these questions weakens, the cost is not limited to today's fund investors. A much wider area can be affected, from capital inflows to public offerings, from bond issuances to companies' access to finance.

Because capital does not only seek return; it also seeks predictability, transparency, and reliable pricing. When trust in the market's price and rules is damaged, the investor demands a higher risk premium in return or turns to other markets. Thus, a confidence problem that starts in the capital market can turn into more expensive and more limited financing for the real sector over time. Therefore, what needs to be protected here is not only the savings of the fund investor, but the reliability of Turkey's capital markets.

FREE MARKET IS NOT AN UNSUPERVISED MARKET

One should not fall into a false dilemma here. A market where the state intervenes in every price movement is as unhealthy as a market where supervision is insufficient. The duty of the state is not to cover every loss of the investor; there is risk in the nature of investment. However, protecting market integrity, preventing manipulation, reducing information asymmetry, and ensuring that the investor can clearly see the risk they are undertaking is the fundamental responsibility of the public.

For this reason, excessive concentration in funds, leverage, liquidity mismatch, related party transactions, and valuation methods should be closely monitored. The investor should be clearly shown not only how much was earned in the past, but also at what risks this return was obtained. Because in a healthy capital market, freedom and supervision are not opposites of each other. On the contrary, effective supervision is the guarantee of competition, transparency, and fair price formation.

WHO WILL PAY THE BILL? The Investor, the Responsible Parties, or the Public?

As of today, there is no finalized situation regarding the coverage of losses in liquidated funds from the public budget. This needs to be underlined in particular. However, past crises teach us to ask a more fundamental question: If public intervention is required for systemic reasons, who will bear the cost? The investor? Fund managers and partners? The financial sector? Or will the loss be spread to wider segments of society through channels such as taxes or public borrowing?

The fundamental principle here should be clear: A structure where private gains are written to individuals and losses are distributed to society should not be formed. In economics, this is called "moral hazard." If market actors think that the gains they obtain by taking high risks will remain with them; and that when things go wrong, the loss will be spread to the public or wider segments of society, they may be encouraged to take more risks in the future. For this reason, the purpose of a possible public intervention should not be to nationalize private investment risk, but to reveal the source of the loss and the chain of responsibility while protecting market stability. Otherwise, while trying to solve today's crisis, the incentives for tomorrow's crisis may be created.

The investor bears the result of the risk they take under normal market conditions. However, if there are transactions contrary to the legislation, manipulation, managerial fault, or lack of supervision, it should be determined within the framework of the law from whom and to what extent the resulting cost originates.

In case public intervention becomes mandatory, the chain of responsibility and, if possible, the mechanisms that will ensure the recovery of the loss from those responsible should be clearly stated, as well as its justification, scope, and limit. Because protecting the investor is one thing, nationalizing private investment risk is another. Otherwise, not only public finance but also market discipline is damaged: The expectation that the loss can be transferred to society while the gain remains private encourages taking more risks in the future. For this reason, the real issue is not just "how much is the loss?". The real question is why the loss arose and who it will remain with in the end.

CONCLUSION: First the Balance Sheet, Then the Account, Then Reform

The fund crisis on Turkey's agenda is not just a matter of hundreds of billions of liras in financial scale or hundreds of thousands of investors; it is a serious test of confidence that calls into question the functioning of the market, the effectiveness of supervision, and how gains and losses are shared among whom. How did this system grow so large, who won while it was rising, why couldn't the risks be limited in time, and who will pay the bill in the end?

There are important allegations that some large investors reduced their positions by taking advantage of high returns before the crisis, and that there were connections between fund managers and political or bureaucratic circles. It would not be correct to pass judgment on these without them being revealed with concrete data. What needs to be done is to draw up the real balance sheet first: It should be clarified how much real money entered the funds, how much of it left, who won, who lost, and how much can return to the investor at the end of the liquidation.

A structure where private gains are written to individuals and losses are written to society should not be formed. The expectation that the gain will remain private and the large loss can be transferred to the public encourages taking more risks. This situation, defined as "moral hazard" in economics, can prepare the ground for tomorrow's crisis while solving today's crisis. For this reason, a possible public intervention should protect market stability instead of nationalizing private investment risk; and should reveal the source of the loss, the chain of responsibility, and, if necessary, from whom the loss will be collected.

But there is a more fundamental question: Why was the system able to reach this size when risk signs had been seen earlier?

Turkey experienced the bankers' crisis, banking crises, and the İmar Bankası example. After every major tremor, rules were renewed, and institutions and surveillance mechanisms were strengthened. However, the financial world has also changed. Funds, algorithmic transactions, leverage, repo markets, and increasingly complex financial connections are pushing the limits of traditional supervision.

For this reason, the lesson is clear: You cannot manage the financial markets of today with the supervision system of yesterday, and the financial markets of tomorrow with the supervision system of today. Supervision must now be not only tighter; but also faster, technological, holistic, and risk-focused. Extraordinary fund returns, concentration in shares with low actual free float, leverage, related party transactions, and sudden money movements should be seen not after the crisis breaks out, but while the risk is growing.

Artificial intelligence, machine learning, and big data analytics are important tools for this transformation. An integrated surveillance infrastructure should be established where the SPK, Borsa İstanbul, Takasbank, and, if necessary, MASAK can see the same risks simultaneously and detect extraordinary movements at an early stage. Because in modern financial markets, what is more valuable than a perfect examination conducted months later is a timely intervention made while the risk is growing.

In the end, the real value that needs to be protected is trust. The duty of the state is not to cover every loss of the investor; but to ensure that the market operates fairly, to prevent manipulation, to see the risk in time, and to hold those who violate the rules accountable. What Turkey needs is not a financial architecture that nationalizes investment risk; but a strong financial architecture that sees the risk before it grows, makes those responsible accountable, and protects the trust of the saver.

Because trust in capital markets is not about everyone winning. Trust is knowing that even when you lose, the game is played fairly, the price is based on reality, the account is kept correctly, and the supervisor is not behind the market.

For this reason, the balance sheet should be drawn up first, then responsibility should be determined, and then a system should be established that will prevent the same risks from growing again.

And in the end, the question waiting for an answer is still the same: While the house was winning, to whom was the gain written; if the house loses, who will pay the bill?