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Monday, 5 October 2026dailybeirut.com
Economy
JP Morgan analysts flag risks to Turkey's 3% 2026 GDP forecast as regulators order the closure of 131 investment funds managing over $20 billion.
Turkey’s investment sector faces a deepening crisis following regulatory orders to liquidate 131 funds operated by seven asset management companies. These entities hold assets exceeding $20 billion, with the final recovery value for investors remaining uncertain amid ongoing market volatility.
Analysts at JPMorgan have issued warnings that disruptions in this sector pose tangible negative risks to their projection of 3% growth for the Turkish economy in 2026. This assessment coincides with significant pressure on the Istanbul Stock Exchange during September, driven by concerns over the implications of mass asset sales and fund closures.
The instability began when several funds encountered difficulties meeting investor redemption requests. Data indicates that the total assets of the affected funds fell by approximately 272.5 billion lira, or 21%, reaching 992 billion lira by September 16. This decline resulted from both capital withdrawals and drops in unit prices.
The regulatory body stated that the liquidation process may take six months. Investors holding less than one million lira in certain funds will recover their full net investment. Those with holdings of one million lira or more will receive an initial payment of one million lira, with the remainder determined after asset sales and distribution of proceeds.
The crisis has highlighted the dangers associated with rapid expansion and concentrated investment strategies. A prominent example is the "TLY" fund managed by Terra Portfoy, which recorded a return of 747% in lira terms between January and July 2025. By September 2026, its cumulative return exceeded 15,000%, while its assets swelled to roughly $5 billion.
With half a million investors involved, the actual losses will depend on the prices achieved during asset sales. Low-liquidity stocks face potential further declines if sold in large volumes. Market participants are now focused on the six-month timeline to determine the final liquidation values and the amount ultimately returned to investors.
