Pusula Portfoy, a Turkish asset manager, defaulted on investor redemption requests for funds totaling around $7.5 billion in assets under management. This failure to meet withdrawals caused significant concern in the Turkish financial markets, as investors worried about potential liquidity stress spreading throughout the country's fund industry. The Borsa Istanbul 100 Index plunged by as much as 5.7% on September 16, extending a two-day decline to 6.9%, marking the largest drop since March 2025. All but one stock in the benchmark index fell, with Destek Finans Faktoring AS experiencing a 10% decline. The index later pared some losses, trading 3% lower by midday.
The defaults at Pusula Portfoy occurred as the asset manager was in the process of being acquired by Tera Group, a larger fund manager. Tera Group had previously announced on September 9 and 10 its intention to acquire Pusula Finans Holding and its affiliated companies. Tera Yatirim, a unit of Tera Group, clarified that the redemption issues at Pusula should not be interpreted as a reflection of Tera's own financial health, emphasizing that the deal was still awaiting regulatory approval, and the funds were not yet its legal responsibility.
The Capital Markets Board's (CMB) recent policy to limit funds with concentrated positions in illiquid stocks contributed to Pusula's liquidity challenges. Fintables data indicated that investors had withdrawn approximately $129 billion from Pusula funds since late August. This situation prompted a circuit breaker on the BIST 100 index after its decline reached 5%, and over 350 shares triggered circuit breakers during the session. Muhammet Yariz, chairman of Pusula Finans Holding, was arrested as part of an investigation into the company.
