Turkey's $20 Billion Fund Collapse Explained

Turkey's $20 billion fund collapse shows how self-dealing stock purchases and weak enforcement can inflate NAVs until buying simply stops.

• Self-dealing loop: Tera's flagship fund held 99% of assets in its own parent company's stock in 2023, inflating NAV, parent valuation, and share price in a self-reinforcing cycle academics call a "self reinforcing by construction" loop.
• Reported returns: Tera's flagship fund claimed over 66,000% returns in three years; stocks it IPO'd like Destek Finance Factoring rose 4,700% to trade at 132x earnings versus JPMorgan's 15x.

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