The Herald – Toscafund, the hedge fund that was a catalyst for the sale of ABN Amro, made £158m profit in 2007 when Royal Bank of Scotland led the disastrous £49bn acquisition of the Dutch bank.

The investment firm, whose holding company is chaired by former Royal Bank chief Sir George Mathewson, enjoyed a spectacular increase in earnings which appears to have been helped by a surge in the value of ABN Amro.

The revelation of Toscafund’s success may stoke fresh controversy about hedge funds. These have been accused of causing massive problems for the UK’s banks with investment policies focused on making short-term gains.

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