Peloton Partners has begun shutting down a £1bn London-based hedge fund due to severe losses as a result of the credit crunch.
Another fund which the firm manages is also reportedly facing problems according to a letter sent out to investors.
The fund, known as ABS Master Fund, did not invest in sub-prime mortgages, instead preferring to invest in prime opportunities in the US.
However, the fallout of the sub-prime crisis has cause major problems across the US housing market, resulting in a decline in the value of prime assets.
Peloton Partners was founded by Ron Beller and Geoff Grant, who were both former partners at Goldman Sachs.
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