Polygon, the Anglo-US hedge fund group which built a name for investor activism at companies such as British Energy, is suspending redemptions in its flagship $4bn Global Opportunities multi-strategy fund while it unwinds the fund and returns money to investors.

The restructuring of one of London’s best-known hedge funds is the latest sign of the crisis in the industry where client redemptions and a squeeze on funding by banks is forcing funds to sell assets into falling markets.