Food prices are not a topic we cover often cover, but then a note from Toscafund landed in our inbox arguing that there’s no impending food supply crisis. Indeed, worries about surging inflation are simply misplaced. The hedge fund’s Savvas Savouri argues that rising food demand from a growing global population will trigger a supply response, with technology facilitating it.
So there’s going to be more processed food, not less of it. Read more
Dodgy “rent-a-doctor” company explodes — film at eleven:
HCL announces that the ordinary shares of the Company have been suspended from trading on AIM with immediate effect… Read more
An end of May snapshot…
Tudor BVI Global MTD (2.26%) YTD: (0.49%) Read more
Toscafund is raising capital to acquire up to £500m of UK residential mortgages, the FT reports. The London-based hedge fund has already closed a £250m fund of UK subprime mortgages, launched late last year. The two new funds will position Toscafund as one of the largest operators in the European secondary mortgage market, highlighting the willingness of more nimble market participants to step into the lending void left by banks.
London will thrive as a financial centre over the next decade as the natural western hub for emerging market growth, according to UK hedge fund Toscafund. While some UK funds such as BlueCrest Capital and Brevan Howard move staff to Switzerland amid warnings of the City’s imminent demise, Savvas Savouri, Tosca’s chief economist, predicts that London will attract at least 100,000 new financial services jobs over the next decade, spurred by growth of the BRIC nations.
Compiled by Alpha Magazine, the 2009 top-50 European hedge fund list has just been released.
It’s been a bad year for GLG, which drops from second position to eigth, while Barclays Global Investors moved down from first place last year two notches to be beaten by Man Investments in second place this year, with Brevan Howard coming in at the top. Read more
Profits at Toscafund’s main fund fell more than 80% last year as redemptions from investors and bad bets on financial stocks stripped 60% from its value. But Toscafund Asset Management has bounced back 25% since the start of the year as the market has improved, and new investors have started investing in small numbers since March. The fund manages about £1.7bn in assets.
Toscafund Asset Management issued an unusually impassioned plea to its investors to stick with its core hedge fund after a 20% drop in performance during October pushed its fall so far this year to 66%. Martin Hughes, the former star banks analyst who previously worked at Tiger Management and founded the hedge fund eight years ago, suggested in a monthly review that its Tosca portfolio had been the victim of a campaign by other market participants to drive down the value of its holdings. He urged clients not to buckle and redeem their investments, which would only hand a “free lunch” to others. Toscafund last month said it was splitting the fund, giving clients the chance to stay, subject to a one-year lock-up, or redeem, creating the possibility that the entire fund could be wound up. The fund has fallen in value to about £2.5bn, said a person familiar with the matter.
So which US bank was Martin Hughes going to get taken over by Spain’s Santander, which would then have stepped up with a rescue deal for Washington Mutual, before the US authorities went and spoilt everything?
We ask because the matter is referred to in the latest monthly report to shareholders in Mr Hughes’ hedge fund, Tosca – a disturbing and fantastical tome that is now being brandished by anger investors. Read more
Toscafund, the largest London hedge fund specialising in financial services, disclosed on Thursday that it had a 6% stake in Washington Mutual, making it the second-largest investor in the biggest US savings and loan group, sending shares in WaMu up more than 12%. It also said in a separate filing with the SEC that it had a 5% stake in Sovereign Bancorp, the second-largest S&L. The moves suggest that the hedge fund is betting that the two embattled US companies may be through the worst of the effects of the credit crunch or that they could soon be bought. WaMu shares rose 12.5% on Thursday to close at $5.33. They were trading at nearly $40 a year ago.
One of London’s biggest hedge funds said it may have come under speculative attack from competitors on Wednesday after several of its largest holdings plummeted amid widespread rumours it was liquidating a portfolio. Toscafund, run by Martin Hughes, one of the “Tiger cubs” created after the closure of the Tiger Management hedge fund, said the swirling rumours were “clearly totally wrong”. Several investors in Tosca said the fund was unlikely to collapse as Hughes had made only light use of leverage, and that the sharp share price moves would be at least partially offset by successful short positions held by the fund.
Toscafund, the $7bn London hedge fund that backed the Virgin bid for Northern Rock, expects other struggling banks to look for outside backers and is prepared to step in to help buy control, according to Martin Hughes, founder and chief executive. Hughes will also on Monday announce the fund has hired John McFarlane, the former chief executive of Australia’s ANZ bank, as a director, adding to the top-level advisers he can deploy.
Okay, so it wasn’t a publicity stunt. Richard Branson’s Virgin group on Friday disclosed details of its proposal to take over Northern Rock, re-naming the business Virgin Money and generally getting everyone – from Westminster to Canary Wharf, via Threadneedle St – off the hook.
And the names on the deal mean we must take the proposal very seriously indeed. While Virgin will contribute its brand, the real financial underpinning is coming from insurer AIG, distressed buyout specialist Wilbur Ross, Hong Kong investor First Eastern Investment Group and Toscafund, the hedge fund led by former RBS chairman Sir George Mathewson. Read more
UK hedge funds are following the US pattern as older, more established London hedge funds spawn second-generation funds, highlighting the limited supply of investment bankers willing or able to raise large sums, reports the FT on Monday.
Mr Turner’s move follows the setting up of two large funds by former senior hedge fund managers. Jabre Capital, created in Geneva by former GLG Partners star trader Philippe Jabre, now runs $4bn, while Talaris Capital, founded by Nicolas Andine from Gandhara Capital, has grown to $925m since starting trading in January, notes the report. Read more
A second British hedge fund will on Wednesday join the attack on ABN Amro when the $4.5bn Toscafund warns the Dutch bank not to launch big acquisitions, and calls for a merger with a better-run rival. Tosca owns more than 1 per cent of ABN, which is under attack from The Children’s Investment fund, which wants ABN to break itself up. The move comes amid controversy over the role of hedge funds at ABN and arguments about activism from other funds attacking Dutch companies including Stork, the industrial conglomerate, and Ahold, the food retailer. However, Tosca will make clear it is not working with TCI and describes its investment as “passive”. It has already told management it is unhappy, but will say it is hoping for a “positive, constructive” response from the bank on how to improve shareholder returns.