London- and Dubai-based Toscafund Asset Management has raised about $242 million for a new fund that was launched this week — Tosca Commercial Property Fund.
Tosca Commercial Property is a private equity–like vehicle formed in a joint venture with London & Scottish Investment Partners, a Scottish-based investment firm. The fund is designed to buy real estate properties in principal cities in the U.K. outside London, according to a Tosca spokesman. It will mostly look to purchase office buildings and light industrial properties. According to the spokesman, the fund is an opportunistic venture born of the belief that the U.K. real estate market is finally turning. The fund figures to buy from banks looking to shed real estate assets to raise capital.
LSIP will manage the fund and make the investments, while Tosca will bring its distribution and fundraising skills to the joint venture. The fund, which will include two feeders, will have a five-year lockup and charge a 0.9 percent management fee and 20 percent performance fee.
This is not the first time Tosca has created a fund when it sensed an unusual opportunity. In 2009 it launched a fund that invested in depressed mortgage-backed securities. Earlier this year it launched Tosca US, a U.S. feeder for Toscafund, its flagship fund.
Toscafund Asset Management was founded in 2000 by Martin Hughes, who had previously served as head of the global financials team at Julian Robertson Jr.’s Tiger Management Corp. from 1997 to 2000. Unlike many of the other Tiger Cubs, which seem to gravitate to technology, Internet, media and consumer stocks, Toscafund specializes in financial stocks.
John De la Hey, who worked at Tiger from 1997 to 2000 and has been with the hedge fund manager since its inception, took over Toscafund in December 2008 after it lost 67.54 percent in the first 11 months of that year. De la Hey steered the fund to a 43.67 percent gain in 2009 and has posted a 22.6 percent annualized return over the life of his run. The fund was up 16.63 percent in the first three quarters of this year.
As a result, the firm now has more than $2 billion under management, up from $1.3 billion earlier this year but still way off its high of more than $6 billion, when Toscafund’s annualized return exceeded 17 percent, including the 2008 losses.
