What Is a Serbest Fon?

Free funds (serbest fonlar, Türkiye's counterpart to hedge funds) are investment funds whose units may be sold only to qualified investors and which are exempt from most of the SPK's portfolio limits. They are issued under a free umbrella fund. Because rules such as concentration limits and the ban on short selling and margin do not apply to them, they can use wider strategies and leverage; in return, they produce less public information.

What exactly is "free" about them?

The freedom in the name is not about the fund promising anything to the investor. It is about part of the rules the SPK applies to other funds not applying to these funds.

Article 25 of Communiqué III-52.1 on the Principles Regarding Investment Funds says this: free funds may invest, without being subject to the portfolio and transaction limits in Articles 17 to 24 of the Communiqué, within the investment strategy and limits published on the fund's KAP page.

What is in those articles? Examples:

• The ban on short selling and margin trading. Under Article 24(4), a fund may not engage in short selling or margin securities transactions. Free funds are outside this ban.
• The derivative position ceiling. Under the same article, the open position arising from derivatives may not exceed the fund's total value. Free funds have no such ceiling; their risk limits are published on the KAP page.
• Concentration limits. The ratios determining how much of a fund may be invested in a single issuer or asset also fall in this range.

Leverage — enlarging a position beyond own capital by borrowing or by using derivatives — arises from these exemptions. Leverage magnifies both gains and losses.

What a fund may and may not do is written largely in its own prospectus and KAP page rather than in the regulation. For that reason two free funds may look nothing alike. "Free fund" is not a strategy; it is a legal framework.

Qualified investor funds: who can buy them?

Free funds are also called "qualified investor funds", because that is their definition. Under Article 6 of III-52.1, a free umbrella fund covers funds "established for their units to be sold only to qualified investors".

Qualified investor is defined by reference to the SPK's regulations on investment firms. In Communiqué III-39.1, a professional client is described as "a client with the experience, knowledge and expertise to make its own investment decisions and assess the risks it assumes". Banks, brokerage houses, portfolio management companies, insurance companies and legal entities above a certain size fall directly within this scope.

For individuals, the route runs through becoming a "professional client upon request". Article 32 of the Communiqué lists three criteria: trading volume and number of trades over the past year, total financial assets, and professional experience or licence. To be treated as a professional client, at least two of these must be documented. For the qualified investor definition, however, the third paragraph of the same article sets a separate rule: the decisive one is the financial-asset criterion.

This amount is not fixed; the Board may change it. By Principle Decision i-SPK.37.7, published in the SPK Bulletin dated 19.12.2025, the amount required for total financial assets — including cash deposits and capital market instruments — was raised from 1 million TL to 10 million TL. The trading-volume criterion was also raised from 500 thousand TL to 5 million TL.

Two details matter:

• The increased amounts apply to those becoming qualified investors for the first time. Those who acquired the status before the decision keep it.
• The new amounts do not apply to the qualified investors to whom real estate investment funds and venture capital investment funds are sold; the previous amounts remain in force there.

The selling institution is obliged to obtain and keep information and documents showing that the investor holds qualified investor status. In sales through TEFAS, it is checked that the investor is registered as a qualified investor at MKK.

Why does this threshold exist?

The threshold is not a door to privilege; it is a trade in protections. An investor treated as a professional client cannot benefit from some protections that a general client enjoys. The SPK's Guide on Investment Services and Activities and Investment Firms lists them one by one: a suitability test is not mandatory; the annual reconciliation and monthly reporting of assets held in custody may be switched off by written consent or by contract; risk disclosures beyond the general risk notice are made only on request.

The logic is this: in a product that can use leverage and derivatives and whose price may be published once a month, if the firm is not expected to test the product's suitability for the client, the burden of assessing the risk rests with the investor. The threshold is an attempt to describe the group presumed able to carry that burden.

Fees and the performance fee

Ordinary funds have an annual ceiling on the total expense ratio: Article 33 of the Communiqué applies the maximum ratios set by fund type in Annex 4. The sixth paragraph of Article 25, however, says that Article 33 does not apply to free funds. So free funds have no expense ceiling coming from the regulation; the fee structure is set in the fund's own documents and on its KAP page.

Performance fees are common in these funds. A performance fee is an extra fee taken from the portion of the fund's return that exceeds a pre-defined threshold value or benchmark. Its principles are subject to Communiqué VII-128.5; the management fee rate and the basis on which the threshold value is set are published on KAP.

Why are they less visible and less liquid?

• Price. For ordinary funds, calculating and publishing the unit price daily is the rule. For free funds, calculating the unit price and notifying investors at least once a month is sufficient.
• Redemption period. For the return of units to the fund, periods different from and longer than the price-publication period may be set. Money can take weeks, not days, to leave.
• Exchange. Article 15(3), which allows units to trade on the exchange, does not apply to free funds.
• TEFAS. Platform membership is mandatory for most funds; free funds are brought within the platform only at the founder's request. Even on the platform, they may be sold only to qualified investors.
• Documents. Preparing an investor information form is optional for free funds. Those traded on TEFAS are the exception; they also publish a monthly portfolio allocation report.

Taken together this means: less frequent and less standardised information is available about a free fund than about an ordinary fund. The list of free funds traded on TEFAS is on the free funds page.

The tax side

Gains from free funds are subject to withholding under provisional Article 67 of the Income Tax Law. The rates are set by Presidential decrees and vary by the fund's type, by whether it trades on TEFAS, and by the acquisition date of the unit. Because they have changed more than once in recent years, no fixed rate is given here; the applicable rate is in the fund's own documents and in the Revenue Administration's regulations.