One of London’s oldest hedge funds has bought a fresh stake in Royal Bank of Scotland, the lender still majority-owned by the UK government.

Toscafund Asset Management, founded by Martin Hughes in 2000, has been talking up the prospects for RBS, which it describes as a “well-run, profitable and now capital heavy bank.”

The position places Toscafund in opposition to Steve Eisman, the American star of The Big Short, who is shorting RBS and two other British banks.

Toscafund’s insights into RBS are aided by George Mathewson, the former chairman of the bank, who has been on the hedge fund’s board since 2006.

The $4bn firm told investors in its Aptus fund, which focuses on financials, it had taken a fresh position in January as it “could no longer ignore [RBS’s] capital return prospects while we have become less nervous of a no-deal Brexit or a Corbyn government.”

Portfolio manager Johnny de la Hey added: “RBS is a posterchild of the worst excesses that led to the [financial crisis] and has spent the last decade reshaping its footprint, retreating from investment banking, reducing expenses, building capital and redressing those past mistakes. However, that is the past.”

The British government still owns 62% of RBS, which has been majority state-owned since the financial crisis. It hopes the bank will be fully private by 2024.

Steve Eisman, whose bets against the subprime mortgage market were immortalised in The Big Short, has added this year to his short position against RBS.

Now a Neuberger Berman portfolio manager, he is launching TM Neuberger Berman Absolute Alpha, a fund targeting UK investors which seeks to capitalise on opportunities stemming from management disruption and change across various sectors and companies.

He also has shorts against Lloyds and Barclays.

Toscafund takes stake in “well-run, profitable” RBS on EuroHedge.