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Turkey’s sovereign wealth fund stepped into the stock market on September 17, buying blue-chip equities to arrest a brutal selloff that had erased roughly 8-10% from the benchmark BIST 100 index in just two to three trading sessions. The culprit wasn’t geopolitics or a currency crisis this time. It was something more mundane, and arguably more alarming: a wave of redemption defaults rippling through the country’s investment fund sector.
Türkiye Varlık Fonu, known as TVF, executed its purchases through an exchange-traded vehicle managed by state-owned Ziraat Portföy, targeting constituents of the Borsa Istanbul 30 Index.
What triggered the selloff
The crisis started in a corner of the market that rarely makes international headlines: Turkey’s portfolio management industry. Several fund managers, including Tera Portföy and Pusula Portföy, defaulted on investor redemption requests.
Regulators responded by suspending trading in funds from seven managers and initiating the liquidation of 130 to 131 funds. Those funds collectively held assets exceeding TL 890 billion, roughly $18.3 billion.
The government’s multi-pronged response
TVF’s equity purchases were just one piece of a coordinated stabilization effort. Turkey’s central bank simultaneously cranked up lira liquidity by expanding repo funding to TL 300 billion and raising interbank borrowing limits.
Finance Minister Mehmet Şimşek moved to reassure markets, characterizing the disruption as temporary and confined to a subset of funds.
This isn’t TVF’s first time playing market stabilizer, either. The fund reportedly engaged in aggressive equity and bond purchases during a period of political turbulence in May 2026, establishing a pattern of direct state intervention when markets wobble.
How TL 300 billion in liquidity works
To understand the central bank’s repo expansion, picture a short-term loan facility. Banks pledge government bonds as collateral, and the central bank lends them lira in return. By raising the ceiling to TL 300 billion, the central bank essentially told the financial system: there is more than enough cash available, so stop panicking.
Increasing interbank borrowing limits served a similar purpose. When banks can lend more freely to each other, the plumbing of the financial system keeps functioning.
What this means for Turkish markets
The liquidation of over 130 funds managing $18.3 billion worth of assets represents a structural event that will reshape Turkey’s asset management landscape. Regulatory reforms targeting fund liquidity management, redemption gates, and manager oversight seem all but inevitable.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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