Forex

One of Moore Capital's best traders is spinning out his hedge fund to create a new $2.5bn London-based asset manager in what is likely to be one of the year's biggest hedge fund launches.

Tim Leslie will take the Moore Credit fund and about 30 people based in London and New York who work for Moore Capital, the hedge fund with $15bn under management run by renowned trader and billionaire Louis Bacon since 1989.

Moore will have a stake in the new business, James Caird Asset Management, and said it aims to "build a symbiotic relationship" with it. The move reflects a growing trend in Europe towards the creation of second-generation hedge funds, with many of the biggest launches created by experienced hedge fund managers rather than investment bank proprietary desk traders.

It also comes as untested managers are finding it much harder to raise money, reflecting increased caution among big institutional investors keen to see strong risk controls in place before they invest. Mr Leslie has an enviable record with low-risk returns, having avoided the disasters that befell many hedge funds last year and produced annualised returns of just over 15 per cent with low volatility, according to investors.

That's odd too because hedge funds are beginning to tighten their belts after all the turmoil in the bond and debt markets. These translate into losses and looks bad on the bottom line, and banks in response are going to lend less and less.