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Morning Brief: Toscafund Launches New Fund

The London firm is jumping on the private investment bandwagon with a new offering focused on small to mid-market opportunities in Europe.

Toscafund Asset Management is launching a new fund. The London firm is creating the Tosca Private Markets Fund and plans to start off with nearly $400 million. It will be run by Fabrizio Cesario and George Koulouris, both of whom previously worked for AnaCap Financial Partners. The new fund, which targets annualized returns exceeding 15 percent, will focus on small to mid-market opportunities in the European financial and business services sector. The fund plans to invest across the capital structure, asset classes, and European geographies.

In a press release, Toscafund says European financial services account for 25 percent of the European Union’s GDP.

“A combination of changing regulation, rapid technological advance, macro-economic policies and a refocus on core activities by mainstream players are driving change and creating opportunities in what is a diverse and complex field often shunned by large generalist funds,” the firm added in the release. Tiger Cub Martin Hughes, founder and chief executive officer of Toscafund, said in the press release that the firm previously had a relationship with the two managers.

Toscafund currently manages a total of $3 billion. Through August, the Tosca Opportunity Fund, an activist fund managed by Hughes, has gained 10.36 percent. The Tosca Master Fund, a long-short fund, is up 24.59 percent.

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Mick McGuire’s Marcato Capital Management nominated a full slate of ten candidates to the board of Deckers Outdoor Corporation, best known as the maker of UGGs. They include Matthew Hepler, a Marcato partner.

“Deckers has enjoyed a strong, profitable brand with UGG for many years, yet has failed to translate this enviable position into growth in earnings and shareholder value,” stated McGuire, whose San Francisco activist firm owns 6.1 percent of the shares, in a press release. “Given the company’s significant underperformance compared to peers, coupled with the board’s failure to take the necessary corrective strategic action, we believe change is required.”

McGuire asserts his firm has several times sought to “engage constructively” with the board to add new directors and develop a strategy for growth and boosting margins and return on invested capital. “Unfortunately, our efforts to work collaboratively to enhance shareholder value have been met with significant resistance,” he added in the release.

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Elliott Associates sold nearly 110,000 shares of Imperva, reducing its stake in the cyber security software company to 9.5 percent. In a regulatory filing, Elliott said it reduced its stake after the stock rose “meaningfully” from its cost basis, stressing it remains a “sizable investor and a top 5 shareholder.”

Elliott added in the filing it is “pleased with the operational progress achieved” at the company over the past year, citing its recent revenue growth of 29 percent last quarter and “its significant operating income improvement.” The multistrategy and activist hedge fund firm also said it is “highly supportive” of Imperva’s new chief executive officer Chris Hylen, asserting he had a strong track record as the CEO of Citrix GetGo.

Elliott initially disclosed its activist position in Imperva in June 2016, asserting at the time the stock was “materially undervalued,” adding it “operates in a highly strategic area of the technology industry with an attractive competitive position and a compelling product set in both the web application firewall and database activity monitoring markets.”

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Steven Cohen’s family office Point72 Asset Management nearly quadrupled its stake in Array BioPharma to about 9.2 million shares, or 5.4 percent of the total. Array is a clinical-stage pharmaceutical company focusing on developing drugs to treat cancer.

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Viking Global Investors and existing investor KKR co-led a new $135 million financing for BridgeBio Pharma, a clinical-stage biopharmaceutical company. This is Viking’s initial investment in the company. Perceptive Advisors, an existing investor, also participated in the latest financing round.

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