Paul Tudor Jones, who shot to fame and made a fortune when he predicted the 1987 stock market crash, plans to split toxic assets out of his $10bn flagship hedge fund and has suspended redemptions until the restructuring is complete.

In a letter sent to clients on Friday, Mr Jones, who is based in Greenwich, Connecticut, said investors were trying to redeem 14 per cent of the Tudor BVI fund at the end of the year. This would have left the remaining investors holding too large a proportion of illiquid assets, particularly corporate credit in emerging markets, the letter said.