Hedge funds last year broke two cardinal rules for keeping their investors happy: the bulk of them lost money and then a big chunk of the industry refused to give back what was left. After years of positive returns, this came as a shock to many customers, who reacted by cashing in holdings across the sector.

But could this be the best time to put money with a hedge fund? Many big institutional investors seem to think so, even as wealthy individuals are hoarding cash. “We have a ton of interest from new clients such as pension funds in the US,” says Joseph Nicholas, chairman and chief executive of Chicago’s HFR Asset Management, which has $1bn invested in hedge funds.