Listed funds of hedge funds have been failing to produce any kind of positive return in the past couple of months, with share prices plummeting and some funds, such as F&C Event Driven, now planning to wind up.

In part, this failure has been due to the fall in share prices across all asset classes. But the funds have also been affected by the poor performance of underlying hedge funds, which have struggled to raise money and meet requests for redemptions. As a result, the hedge fund universe is expected to contract dramatically over the next year.