Hedge funds hold as much as a quarter of the equity of Germany's largest companies, according to top investment bankers, reflecting growing interest among foreign investors in betting on economic restructuring in the run-up to the country's general election on September 18.

The revelation will intensify the controversy in Germany over hedge funds, after they orchestrated the ousting of Deutsche Börse's management and the overturning of strategy at the German stock exchange group. Christian Meissner, co-head of investment banking at Lehman Brothers in Germany, said: “Hedge funds probably have an average stake of more than 25 per cent in German blue-chip companies. The situation has changed dramatically in recent years.”