John Meriwether, the hedge fund manager behind Long-Term Capital Management, is in the process of setting up a new hedge fund â?? his third.

The move comes barely three months after Mr Meriwether decided to close his second fund manager, JWM Partners, which was wound down after clients saw the value of their investments fall by more than 44 per cent over the course of the financial crisis.

JWM Partners was set up soon after the collapse in 1998 of Mr Meriwetherâ??s first â?? and most infamous â?? fund, LTCM, which triggered a wave of panic across the worldâ??s markets and prompted the US Federal Reserve to take the then-unprecedented step of orchestrating a multi-billion dollar bail-out.

The planned name for the new venture is JM Advisors Management and will be based in Greenwich, Connecticut.

The fund is expected use the same strategy as both LTCM and JWM to make money: so-called relative value arbitrage, a quantitative investment strategy Mr Meriwether pioneered when he led the hugely successful bond arbitrage group at Salomon Brothers in the 1980s.