Peloton Partners, the stricken London hedge fund manager, told investors its flagship $2bn (£1bn) fund was worthless and it did not know how much its remaining $1.6bn fund would have left after banks seized and sold some of its assets.

In a conference call Ron Beller, co-founder, made an emotional apology to investors and revealed that just last month staff and partners invested $73m in the ABS fund. In total, partners and staff had $127m invested, $117m of it from Mr Beller, co-founder Geoff Grant and a third partner.