A City hedge fund that has backed several online estate agents including HouseSimple and EasyProperty has increased its holdings in Purplebricks.
Toscafund Management yesterday informed the London Stock Exchange that it had acquired nearly three million extra Purplebricks shares making it the eighth largest holder of the company’s stock with a total share now of 5.64% of the hybrid estate agency.
The fund has assets worth £4 billion and is led by Martin Hughes, who is known as ‘the Rottweiler’ in City circles partly because when he sees an undervalued asset he then moves aggressively to buy its shares.
Purplebricks’ stock certainly looks under-valued at the moment. They plummeted by 15% in one day last week following the announcement that Bruce was to leave and that its Australian operation would be closing, and have dropped by 79% since their July 2017 peak of £5.13.
But the City appeared to like what it saw following the Toscafund shares move; the hybrid agency’s stock increased by nearly 7% yesterday to £1.12 by end of play.
In February last year the hedge fund led a second round of funding for HouseSimple worth £20 million and before that also helped raise £13 million during an initial funding round for the online estate agent.
In 2015 Toscafund helped raise £16 million for Easyproperty just before its merger with Guild parent company GPEA.
The other key holders of Purplebricks are mostly other City funds including Woodford Investment Management which holds nearly a third of the company’s stock.
Recently departed CEO Michael Bruce also remains a major shareholder with 33.3 million shares or 11% of the company which at yesterday’s share price are worth £37.3 million.