Shafaqna English– The crisis in Turkey’s investment fund sector has intensified sharply. Last month, watchdogs ordered 131 funds to be wound down. These funds were managed by seven asset management companies.
The move came after certain managers cautioned that they could not meet redemption obligations. Put simply, the funds lacked readily available cash to pay back investors. This revealed a dangerous liquidity gap and a rapid erosion of confidence.
The expansion of these funds was remarkably swift. Within just three years, their assets surpassed $20 billion. Close to 500,000 investors entered the market. Among them were political figures, former public officials and well-known personalities.
Their core motive was to earn strong returns that could cushion the impact of a depreciating lira and rampant inflation. As traditional savings lost value quickly, these funds appeared to offer a promising escape route.
Source: Reuters