Quindell stakebuilding sparks share surge

Quindell is flying high Wednesday after it emerged that London hedge fund Toscafund Asset Management has bought another 1.9 million in the insurance outsourcer, taking its stake to over 5%.

Toscafund, run by founder Martin Hughes, bought the stock for its Tosca Mid Cap and Tosca Opportunity funds. It now owns almost 23.5 million shares. The recent buying, according to today's regulatory news statement, occurred on 2 January, the day Quindell confirmed it was in talks to sell parts of the business to generate much-needed cash.

Quindell shares have almost tripled in value since plunging to 24p last month after founder Rob Terry offloaded over 25 million Quindell shares.

And Toscafund is already sitting on a tidy profit on this latest purchase. Quindell shares traded as high as 48p on 2 January, but hit 65p Wednesday. Even at the current selling price of 64.5p, the fund's new shares have already bagged a profit of at least £314,000.

But it hasn't always got it right. In 2008, the company backed Virgin's aborted takeover of Northern Rock, and it lost heavily on collapsed American insurer Washington Mutual and housebuilders Redrow and Taylor Wimpey.

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