Cheyne Capital - Toscafund and Cheyne Capital to Launch Mid-Cap UCITS III Fund
Hedge fund firm Toscafund later this month will launch a UCITS III version of its mid-cap fund following
demand from private clients, its chief executive said on Tuesday [March 2].
The UCITS version fund will be launched in mid-March on a platform provided by Deutsche Bank and
expects to close at $300 million, Martin Hughes told the Reuters Private Equity and Hedge Fund Summit
The existing mid-cap fund has already raised $110 million.
UCITS, or Undertakings for Collective Investment in Transferable Securities, are E.U.-domiciled mutual
funds targeting retail investors.
Creating a UCITS III version, which would comply with European Union regulations on transparency and
liquidity, will require no change in investment strategy, Hughes said.
He said that some 80% of the fund's holding could be liquidated within a week, adding the UCITS III
version will be "an alternative to the index-tracking large investment trusts."
Because of their high liquidity, UCITS have grown in popularity in the aftermath of the credit crisis when
many investors found themselves locked into investments when some securities markets turned illiquid
and asset managers imposed restrictions on withdrawals.
On Monday [March 1] hedge fund Cheyne Capital told Reuters it was set to launch a UCITS III mergers
and acquisitions fund Previous Reuters Story.
Mr. Hughes said: "We have been asked by private clients to make it available; Deutsche Bank has
facilitated that and I would expect quite a big interest."
Toscafund took nine months to choose the platform and considered Deutsche Bank and Bank of America.
The former prevailed because it allowed the hedge fund manager to keep its name on the UCITS fund
"It lets us keep the name, the fees were the same—it will stay Tosca Mid-cap. It is the first and I would
suggest that, because it is the only one that has been requested, it would be our last," the CEO said.