The net flow of capital out of funds of hedge funds between July and September, the first for almost 10 years, is the first visible sign of its malaise, analysts said.

Hedge Fund Research, a data provider, said investors had pulled a net $1.2bn (€1bn) from funds of hedge funds for the three months, although the underlying hedge fund industry continued to attract cash. This marks the end of a nine-year run of consistent growth that helped take funds of hedge fund assets from $53bn in 1996 to $375bn at the end of June.