Toscafund is now known largely for its super bullish view of UK economy. The opinion is not applicable to the rest of Europe, rather the managers of Toscafund believe that UK is in a great shape to cash in to the demand that the troubled eurozone cannot fulfill. The fund’s investments have paid off handsomely so far, the returns were up 2.35 percent in April which brought the YTD gain to 10.4 percent.

Toscafund

Recently Toscafund’s founder, Martin Hughes and chief economist Dr. Savvas Savouri spoke to Reuters, we have mentioned Dr.Savouri’s views on UK’s big potential several times. In the recent interview, both managers talked about how UK’s labour market is a strong asset and what could be the ramifications if Britain chooses to leave EU and restrict its immigration rules.

Toscafund On Online Dating And Whitney Tilson

Toscafund  holds major stakes in some companies, the fund owns 14 percent of Redrow plc (LON:RDW), a residential developer, 27 percent of Daisy Group PLC (LON:DAY), a communications system provider and 8.5 percent of Cupid PLC (LON:CUP), the online dating company. Cupid PLC (LON:CUP) has been a short bet of several hedge funds and they have made big profits from it as stock slid over 50 percent in this year. However Tosca is not the only one who is bullish on online dating, Whitney Tilson also shared his long view on Spark Networks Inc (NYSEMKT:LOV), when he spoke at the Value Investing Congress earlier this month.

Tosca also added a long position in Man Group Plc (LON:EMG). Tosca is now the second among UK hedge funds who is bullish on its peer. Odey Asset Management also holds a major stake in Man Group Plc (LON:EMG). Others like Marshall Wace and Lansdowne Partners have placed bets on Man Group’s decline.

Tosca’s View On Banking Sector

The $1.3 billion fund profited from longs in some US and European banks including, Societe Generale SA (OTCMKTS:SCGLY) (EPA:GLE), Citigroup Inc (NYSE:C), ING Groep NV (NYSE:ING) and Natixis SA (EPA:KN). Among insurance companies, Toscafund profited from Unipol Gruppo Finanziario SpA (BIT:UNI), Hartford Financial Services Group Inc (NYSE:HIG) and ST JAMES PLACE CAP (OTCMKTS:STJPF)

Tosca’s managers thinks that the outperformance witnessed in Citigroup Inc (NYSE:C), Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB), Societe Generale SA (OTCMKTS:SCGLY) (EPA:GLE), UBS AG (NYSE:UBS), Australia and New Zealand Banking Group (ASX:ANZ), in the past months, is attributable to resizing of balance sheets, restructuring of assets and exploring the dividend paying potential of their respective stocks.

Spanish And Australian Banks

In the latest letter, Toscafund shared its bearish outlook on Spanish banks. The fund believes that the economy is caving under rising burden of non performing loans and losses from mortgages and SME loans. The fund fails to see why market is overpricing the Spanish stocks when they are at risk from the bulk of unfinanced loans that have not been covered yet.

The monthly letter of Tosca also discusses the valuation of Australian banks which are well structured but the Australian banking sector has not priced in the increased leverage of Aussie households. The huge banking sector of Australia, takes 4 out of the 11 largest bank spots of the world and account for 25 percent of the country’s GDP, which Tosca believes is an alarming exposure. The fund has taken short positions in this sector.

Although still bullish, the fund reduced overall exposure and is focusing on opportunities in UK’s retail banking and Greece’e recapitalised banking sector. Toscafund is of the opinion that the traditional banking sector has completed its high run and could have a slightly difficult time ahead.