Investors pulled at least $45 bn from US hedge funds in September as market turmoil led to unprecedented withdrawals.

Many hedge funds are currently working to prevent far bigger redemptions by the end of the year, when many funds give investors a chance to take out money. To prevent more outflows, some hedge funds had offered to suspend fees if investors kept their money in until March.

A leading alternative investment manager said he expected the hedge fund industry to shrink by 50 per cent in coming months â?? with half the decline coming from withdrawals and half coming from investment losses.

JPMorgan Chase has estimated that hedge fund outflows could total up to $150bn over the coming year.