Talk about a high-risk hedge fund and most people assume it is a tautology. This year’s sudden collapses of the $2bn flagship fund of London’s Peloton Partners and the $1bn New York-based Focus Capital, as well as a raft of smaller funds, has done nothing to change that view.

But a small group of hedge fund investors actively seeks out the riskiest hedge funds – and believes such funds allow them to chase high returns while avoiding the peril behind the blow-ups of the past 12 months: leverage.