Toscafund Preps Small Cap Hedge Fund

Feb 4 2008 | 2:00am ET

London-based Toscafund Asset Management is prepping a U.K. small-cap long/short fund for launch this quarter. The Cayman Islands-based Tosca Small Cap Fund is launching with US$98 million, and is looking to raise as much as to US$500 million.

Paul Compton, portfolio manager and a 22-year veteran of the U.K. small-cap market as an analyst at Merrill Lynch and portfolio manager at Collins Stewart, says the time is ripe for Toscafund’s small-cap offering.

“The U.K. small-cap market is quite big now and there have been a lot of equity issues in the U.K. over the last few years,” Compton said. “We think the sector is quite poorly analyzed by the brokers for a variety of reasons, so it’s an imperfect market. The small-cap indices are down 35% since last summer so the timing is quite good to launch this fund.”

The fund’s fee structure and minimum investment requirement could not be obtained by press time.

Toscafund is headed by Martin Hughes and manages some US$7 billion in total assets. Last year, the firm was involved in acquiring a 40% stake in U.K. buyout firm Penta Capital.

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