ARTICLE · 26 APRIL 2022

A New Turkish NPL Investment Tool: Hedge Funds

Esin Attorney Partnership

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In other words, investors wishing to invest in Distressed Assets are now entitled to invest in these assets by simply purchasing fund interests.

TurkeyTax

Dr. Erdal Ekinci

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Pursuant to a decision of the Capital Markets Board of Turkey ("CMB") ("Board Decision"), the CMB has paved the way for investments in restructured and distressed loans ("Distressed Loans"), and share capital of the companies that are the debtors of such Distressed Loans (together, "Distressed Assets") through hedge funds. In other words, investors wishing to invest in Distressed Assets are now entitled to invest in these assets by simply purchasing fund interests.

What is a hedge fund?

A hedge fund is a type of mutual fund that only qualified investors are entitled to invest in, and that is not subject to restrictions in terms of the investment instruments and transactions that can be included within the portfolio, except for the restrictions that the CMB may introduce. Hedge funds, which are classified as high-risk mutual funds, can freely make investments in accordance with their investment strategies and limits stipulated under their bylaws.

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