The Contrarian's Contrarian: How Kale Portföy's Murat Aydın Built a Value Shop in Turkey's Most Momentum-Driven Market

Kale Portföy Yönetimi A.Ş. manages over 420 million Turkish lira in assets from a modest office in Maslak. It is a small operation by any measure, but its track record is not.

Murat Aydın, 44, founded Kale in January 2018 after eight years as an equity research analyst at Yapı Kredi Yatırım, where his coverage universe was industrials and consumer staples. He spent most of his career identifying Turkish industrial companies that were deeply undervalued relative to their asset bases and earning potential. His calls were, more often than not, correct. The market, more often than not, did not care. The frustration, familiar to any sell-side analyst who has watched their recommendations collected and never traded, eventually reached a point where the logical conclusion was to stop recommending and start owning. He left Yapı Kredi in December 2017. By February 2018, Kale had its SPK licence. By the end of the year, it had its first fund on TEFAS.

The Fund That Almost Wasn't

The Kale Türkiye Değer Fonu, which trades on TEFAS under the code KTD, was conceived as a concentrated value equity fund with Turkish domestic equities only. The mandate is specific by design: no derivatives, no leverage, no government bonds as ballast, no offshore exposure. Fourteen positions maximum. Average target holding period of three years or more. Aydın set these constraints deliberately to prevent the institutional manager's familiar retreat into mediocrity: diversifying into safety when conviction positions move against you, owning bonds to reduce volatility for clients who complain about drawdowns, and generally allowing client service to erode investment process.

The first four years were, by any honest measure, difficult. The KTD fund launched in January 2019 with 18 million TL in initial subscriptions, mostly from former colleagues and two family offices with long enough time horizons to tolerate an unproven boutique. The value factor underperformed momentum in Turkey through 2019 and 2020 as global risk appetite was high, Turkish inflation was temporarily suppressed, and speculative growth names attracted flows that bypassed the kind of unloved industrials and consumer staples that Aydın was accumulating. By mid-2021, the fund had lost several of its early institutional investors to impatience. AUM had grown to only 85 million TL, reasonable for a two-year-old boutique, but well below Aydın's internal projections. One of his two seed investors told him, politely, that the strategy was not working and that they would be redeeming at the next window.

The question that any value manager in an emerging market must sit with is whether the environment simply does not permit the strategy to work as a disciplined, systematic approach: whether the political and macro noise is too great, the institutional investor base too thin, the retail flows too momentum-driven.

Aydın did not change the process. The investor who redeemed was, as things turned out, poorly timed.

Why 2023 Validated the Thesis

Turkey's rate cycle has not been kind to most investors. The period between 2021 and 2023 saw the Central Bank hold nominal rates artificially low despite surging inflation, producing deeply negative real rates that fuelled a frenzied rotation into equities, hard assets, and anything perceived as an inflation hedge. Many Turkish equity funds performed well in nominal terms during this period purely because they owned equities and equities rose. The relevant question, which is often not asked in a high-inflation environment, is whether they outperformed the BIST100 total return index on a risk-adjusted basis. Most did not.

Aydın's fund did, for a specific structural reason. His portfolio was concentrated in companies with hard asset bases (building materials, light manufacturing, logistics infrastructure, food processing) that benefited directly from inflation-driven asset revaluation while also possessing the operational leverage to pass higher input costs through to customers. These are not glamorous businesses. They are not the companies that appear in technology fund prospectuses or on panel stages at fintech conferences. They produce cement, distribute packaged goods, run warehouses. In Turkey's inflationary environment, they were precisely what the market had overlooked.

The normalisation phase, beginning in mid-2023 as the Central Bank reversed course and began a sustained rate-hiking cycle, was the second phase of the vindication. Speculative names, many of which had re-rated to absurd multiples during the easy-money years, sold off sharply. Aydın's industrial holdings, already re-rated to reasonable but not demanding multiples, held their ground or continued to appreciate as earnings quality became legible again. The fund's three-year cumulative return to February 2026 stands at +118%, against the BIST100 total return index's +84% over the same period. The information ratio over three years is 0.68.

Over the full life of the fund, the numbers are better still: cumulative +291% versus the BIST100's +234% from inception through February 2026. The worst calendar year was 2022, when the fund underperformed the index by 12 percentage points as a building materials position was caught in a short-lived government pricing intervention. The best was 2023, with 31 percentage points of outperformance. These are not the statistics of a manager who is tracking his benchmark closely. These are the statistics of a manager who is running a genuinely different portfolio and accepting the tracking error that comes with it.

What the Portfolio Looks Like

Kale currently holds 14 positions. The top five account for approximately 54% of portfolio value. The largest single position represents approximately 15% of the fund. This concentration would be unusual in a UK or European fund structure, where UCITS regulations impose diversification floors. Turkish regulations are more permissive, and Kale treats that permissiveness as an asset. The fund's philosophy, evident in its construction, is that every position beyond the highest-conviction ideas is a dilution. This is not a diversified fund. It is a concentrated fund, and those are different products.

The portfolio turnover figure is instructive. Annual turnover is estimated at approximately 35%, meaning the average holding is owned for roughly three years. This compares with an industry average for Turkish equity funds of somewhere above 180%. The low turnover is not passivity; the portfolio is actively monitored, position sizes are adjusted as theses evolve, and exits happen when either the thesis is disproven or the valuation gap has fully closed. But the fundamental cadence is patient. The fund's history suggests a willingness to accept two years of underperformance when the analytical work supports the long-term thesis. Not many institutional managers, answerable to quarterly performance reviews and client redemption windows, can make the same claim credibly.

The Shortcomings

Kale Portföy's shortcomings are structural rather than process-related, and they deserve direct treatment.

The most serious is key-man risk. Aydın is the sole portfolio manager and makes all final allocation and sizing decisions. His two analysts are capable researchers, but neither has managed a fund and neither has been through a full market cycle in a decision-making role. The firm has no documented succession plan. If Aydın were unable to continue, the fund would face an obvious question about continuity of process. Kale's investor documentation does not reference succession arrangements, which is a gap that investors in a single-manager fund should weigh carefully.

The second shortcoming is accessibility. The Kale Türkiye Değer Fonu has a minimum investment of 250,000 TL, a figure that, while not unusually high by institutional standards, effectively excludes most retail investors who might benefit from the strategy. The fund is listed on TEFAS, technically accessible to any investor with a brokerage account, but the minimum reflects an implicit preference for institutional and high-net-worth capital over the mass retail flows that would complicate portfolio management in smaller-cap names.

Third, and most debatable, is the performance fee structure. Kale charges a 1.6% annual management fee plus a 20% performance fee on returns above a 5% hurdle, subject to a high-water mark. In the fund's best years, Aydın has earned more in performance fees than in the two previous years of management fees combined. This is not unusual in the hedge fund world, but it is above market for a TEFAS-listed equity fund and it concentrates economic upside in the manager at the expense of the investor. The high-water mark is a genuine investor protection, but investors should understand the full fee picture before comparing the fund's net returns to alternatives.

Finally, the fund has no international exposure. The mandate is explicitly domestic Turkish equities only. For investors with liabilities denominated in other currencies, or for whom the Turkish lira represents a concentration risk in itself, this is a genuine limitation. The thesis is that the domestic equity opportunity is large enough and underfollowed enough to generate alpha without the additional complexity of currency management and cross-border research. That may be correct. It remains a constraint.

The Larger Argument

Whether value investing works in Turkey is not a question that seven years of one fund's data can definitively answer. Markets are cyclical, and it is possible that Kale's strong 2023-2025 returns reflect a specific macro regime rather than a durable analytical edge. The question is whether the process will work in every environment, or whether it has been tested only in conditions that happened to favour it. What the track record shows is that the process is consistent, the research is real, and the portfolio reflects analysis rather than index construction.

What Aydın has built at Kale Portföy (a genuinely concentrated value fund, managed by a disciplined analyst who has stuck to a process through a difficult first half and been vindicated) is rarer in the Turkish market than it should be. The shortcomings are real and the track record, while promising, is not yet long enough to be conclusive. But Kale Portföy has done something that most Turkish boutiques have not: generated multi-year, risk-adjusted outperformance through a repeatable process, and documented that process transparently enough that investors can evaluate it. In a market that tends to reward storytelling over substance, that is worth noting.