Sir Paul Ruddock, one of the UK’s most prominent financiers and philanthropists, is to step down as the head of Lansdowne Partners, the hedge fund he co-founded.

The 54-year-old intends to spend more time focusing on his charitable activities. As well as being a big donor to the arts, he is chairman of the Victoria and Albert Museum in London and a trustee of the New York Metropolitan Museum.

Sir Paul is a leading donor to the Conservative party and is among the handful of financiers to have dined at 10 Downing Street. He was knighted in the 2012 honours list.

Lansdowne, which Sir Paul co-founded with Steven Heinz in 1998, is one of Europe’s oldest and largest hedge funds, with current assets under management of $12.4bn. The fund is one of the City’s best-connected organisations and is a significant investor in Lloyds Banking Group, Coca-Cola and Manchester United.

It hit the headlines in 2007 after betting against the shares of Barclays and failed bank Northern Rock – investments which helped it weather the financial crisis – and again in 2010 after hiring former prime minister Tony Blair to give a series of exclusive talks to staff.

Before co-founding the company, Sir Paul was head of international development at the US arm of Schroders, the asset manager. The decision to step down “has been on my mind for a while”, Sir Paul said.

“I wanted to do it when the firm was going through a period of strength and stability. It is something I have been discussing with the senior partners for some time,” he said.

Sir Paul will formally step down in June. He is to remain a significant partner in the company. No replacement had yet been chosen. “I have spent 33 years in finance, and it’s time to move on,” he said.

Peers in the industry expressed surprise that a successor had not yet been lined up. “If I was a client, I would not like the uncertainly,” said the head of one large hedge fund investment group.

Although performance for Lansdowne’s funds has been strong in recent months – its flagship fund made 18 per cent in 2012 and is up 7.6 per cent so far this year – assets at the company have come down from their peak.

Lansdowne managed $16bn two years ago, but partners at the company worried it had grown too large. Withdrawals from its flagship fund in 2011 were not replaced.

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