Toscafund Halts Dealing in One of Its Funds on Valuation Issues

Nishant Kumar and Liza Tetley, Bloomberg News

, Bloomberg

(Bloomberg) -- Toscafund Asset Management has suspended dealing in one of its funds saying it’s difficult to value some of its bets until some corporate transactions have concluded.

The London-based money manager said it would halt monthly net asset value calculations, subscriptions and redemptions in its Tosca Opportunity fund until it has more certainty on the value of its positions, according to an investor letter for February seen by Bloomberg News. A number of the fund’s private positions are currently engaged in corporate transactions, the letter said, making it difficult to value the portfolio.

One of the positions mentioned in the letter pertains to TalkTalk, a British telecommunications company Toscafund agreed to buy in 2020 in a deal valued at about £2 billion ($2.5 billion) including debt. That firm had announced a demerger and refinancing plan, according to filings. The other one featured in the letter is San Leon Energy Plc, in which Bloomberg-compiled data show the hedge fund is the largest shareholder.

An assessment of fair valuation would be possible upon conclusion of various transactions, the letter said. The fund also has a claim, as part of a class-action lawsuit, that could result in a materially beneficial sum being received, it added. The suspension remains in place, according to a person familiar with the matter.

“It is currently difficult to set an appropriate carrying valuation until the various processes are complete,” the firm wrote to clients, adding the suspension would be periodically reassessed “after the completion of various transactions.”

Toscafund confirmed the contents of the letter and declined to comment further.

Founded in 2000 by Martin Hughes, Toscafund manages about $2.5 billion firm-wide, according to its website. The Tosca Opportunity fund operates an absolute return activist equity strategy, investing in private and public UK companies. The fund lost 28% in the 12 months through June 2023, and was down 7.6% in the period from July 2023 through February this year.

(Updates with background in the third paragraph.)