The spillover effects of the subprime mortgage crisis on short-term debt markets claimed another victim on Monday when a $1.5bn (€2bn) investment vehicle run by Solent Capital, a London hedge fund, was forced to begin selling assets.

The vehicle, called Mainsail II, was invested in structured debt such as bonds backed by mortgages and collateralised debt obligations. Almost 90 per cent of its funding was raised in the short-term commercial paper market.