INVESTMENT group Kestrel Partners has upped its stake in online dating business Cupid.

Kestrel is likely to have spent in the region of £165,000 buying an additional 750,000 shares.

That purchase sees it increase its holding in Cupid, which has its headquarters in Edinburgh and is listed on the Alternative Investment Market, to more than 13.9 million shares, equivalent to 19.54 per cent of the business. Cupid's shares closed up 0.25p, or 1.1 per cent, at 23p, which means Kestrel's stake is worth more than £3 million.

The Kestrel share dealing, which took place on Friday, was revealed in a stock market notification published yesterday.

It notes the stake is held through the Guernsey based Kestrel Opportunities fund as well as other clients of Kestrel Partners through JIM Nominees.

The purchase keeps Kestrel as the second largest shareholder in Cupid, behind the company's founder and former chief executive Bill Dobbie.

Mr Dobbie, who holds 14.68 million shares giving him a stake of more than 20 per cent, is a non-executive director on Cupid's board.

Already this week Welsh investor Richard Griffiths, founder of investment bank Evolution and boutique finance house ORA Capital, has doubled his stake in Cupid to just short of nine per cent. That made him the third largest shareholder in Cupid ahead of Majedie Asset Management which has 7.7 per cent.

Cupid, now headed by Phil Gripton, has been trying to return to profit while investing to keep pace with a growing trend towards mobile devices in online dating.