John Devaney, manager of the latest hedge fund to run into trouble with subprime mortgage bets, this year likened investing in the sector to "dancing on the edge of a razorblade". Now it appears he has lost his footing.

Mr Devaney's United Capital Asset Management told investors last week it would suspend redemptions from its Horizon funds, which invested heavily in securities backed by subprime, because turbulent market conditions had prompted an "unusually high" number of requests for withdrawals.