Waystone Investment Solutions’ Tosca UCITS Fund grows from $10M to $125M in Q3 of 2021
What contributed to the growth?
Financials have underperformed for a considerable part of the last decade but, there is a growing consensus amongst investors that banks will matter again over the next 12 months.
Within investor portfolios, the asset class is currently under-owned and under-valued, presenting an attractive opportunity set that has been identified by our client base and helped the Tosca UCITS Fund grow from $10mln to $125mln (as of 7/9/21).
2021 marks the turning point in the COVID crisis, and banks will start to return capital while earnings are upgraded and M&A will accelerate. Banks’ low valuations, high-gearing and small capitalisation opens the prospect of very significant upside over the next 12 months.
Johnny de la Hey, Portfolio Manager of Tosca UCITS Fund commented on the attractive opportunity set & recent fund growth:
“We are delighted to see strong inflows into Tosca UCITS, which is validation of the compelling outlook for the opportunity set targeted by the Fund.
Having underperformed for a considerable part of the last decade, we believe banks will again matter going forward. Catalysts in the coming months include economic recovery, continued strong earnings driven by revenue growth, as well as better credit, further M&A and the now almost certain wave of out-sized capital return along with an option on eventual inflation and rising bond yields. This, in our view, provides an excellent backdrop for investors to re-engage in a sector that is now demonstrably wrongly maligned. We have positioned the Fund to take advantage.”
We believe that a long/short strategy is the strongest approach to this sector as the opportunity set will result in both winners and losers emerging from the crisis. Tosca also has a flexible mandate across the broad financial sector, which includes structural growth names and COVID beneficiaries (payments, digital platforms, real estate and insurance) as well as traditional financials (banking and asset management), allowing them to shift exposure between structural growth and value names across the sector. 2020 saw a higher exposure to growth names and, more recently, a shift towards the value opportunity in traditional Financials.
You can read more about the opportunity set in the link “Tosca – Why Now?” below and why this is not just a reflection of value but tangible, meaningful and near-term catalysts:
If you are interested in learning more about the fund and Toscafund’s expertise in global financials, please contact the Waystone Investment Solutions team below:
