Toscafund has raised US$800 million from investors to increase its investments in the financial services sector.

The London hedge fund, which has been battered by its investments in financials this year, told investors of the new capital last week.

The terms of the new investment include a three-year lockup, bringing the firm’s locked-up capital to US$1.5 billion, according to the Financial Times.

Tosca chief Martin Hughes has argued that banks are undervalued and the doom and gloom surrounding the sector is overdone.