TOSCAFUND IN 15M PAYOUT AS PROFITS DIVE
HEDGE fund group Toscafund paid its highest earner £15m last year, even though profits at the group fell by 83 per cent, it emerged yesterday.
Official US filings show one member of staff at the firm received a “profit entitlement” of £14.9m in the year, despite the group profit dive which was thanks mainly to dire performance on its flagship Tosca Fund.
The firm stopped short of naming the executive who received the sum, but reports yesterday suggested it was likely to be group boss Martin Hughes, known in the City as “the Rottweiler” for his aggressive fund management style.
Vice chairman at the group, former Commerzbank director Mehmet Dalram, told Morning Wire the reports were misleading and he did not know who received the sum.
“It’s not me,” he said. “I don’t know of anyone getting a bonus that big.”
This payout is much less than Hughes made last year when he took home £75m.
The firm, which manages around £1.6bn in assets, said profit for 2008 before members’ remuneration and profit share fell to £26.9m from £158.2m in 2007.
The firm was last year caught on the wrong side of trades, including the failed bank Northern Rock, the collapsed American insurer Washington Mutual, and housebuilders Redrow and Taylor Wimpey.
Following those losses, investors in the flagship fund were offered the choice of either cashing out of their investments or staying in for a minimum of one year. Nearly two-thirds chose to exit.
But the investment business said that this year so far its fund performance has picked up.
The Tosca Fund is up around 25 per cent year-to-date, while the Opportunities fund has risen around 60 per cent.
The Small-Cap fund has gained a stellar 58 per cent and the Asia fund has risen just under 10 per cent.