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Turkish financial authorities are weighing a dramatic increase in the minimum wealth requirements for retail investors seeking access to hedge funds, a move that would limit participation in one of the country's fastest-growing investment sectors following recent market turbulence.
Officials are considering raising the threshold for "qualified investor" status to 10 million liras ($234,184) in financial assets, ten times the current 1 million lira requirement, according to what people familiar with the discussions who requested anonymity because the deliberations remain private told Bloomberg. The proposal aims to shield smaller investors from the sophisticated and potentially volatile trading strategies employed by hedge funds, though the final threshold has not been determined and could still change.
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The regulatory review follows a liquidity crisis at a Turkish portfolio management company in November, when rapid investor withdrawals from its funds sparked concern about potential market manipulation and renewed calls for stricter enforcement measures. The incident highlighted vulnerabilities in a sector that has experienced explosive growth over the past year.
Hedge funds operating in Türkiye now manage approximately $117 billion in assets, having roughly doubled in size during 2024, according to data from the Turkey Electronic Fund Trading Platform, known as TEFAS. The rapid expansion has drawn increased attention from regulators concerned about systemic risks and investor protection.
A committee led by Treasury and Finance Minister Mehmet Simsek convened earlier this month to assess measures for maintaining financial stability, with particular focus on the market impact of both hedge funds and money market funds. The Capital Markets Board, Türkiye's securities regulator, declined to comment on the potential threshold changes.
The proposed increase would represent one of the most significant tightening measures for retail investor access to alternative investments in recent years. Qualified investor designations typically allow participation in less-regulated investment vehicles that employ strategies such as leverage, short-selling, and derivatives trading—tactics generally considered too complex or risky for average retail investors.
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