The best-performing hedge fund manager of the past two years has closed down his funds and is returning money to investors after concluding that the danger of losing money from a bank collapse is too high.
Andrew Lahde, founder of California's Lahde Capital, told investors last week that further credit problems - the basis of his profits - were likely but the reliance of the bet on bank counterparties made it too risky.
The move by Mr Lahde, who returned 870 per cent last year in one fund betting against subprime mortgages, and was at one point up more than 1,000 per cent, underscores the threat that is posed to hedge funds by bank failures.
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