Funds of hedge funds entangled in products managed by Bernard Madoff are slashing fees and writing off investments in a bid to keep investors and cope with the fallout from the alleged fraud by the New York trader.

Nicola Horlick, manager of fund of funds Bramdean Alternatives, has said in a stock exchange filing she has written off Bramdean's investments in Rye Select Broad Market XL Portfolio and Defender hedge funds, each feeders into Madoff's investment program. The New Yorker was arrested last month and charged with a fraud which he is alleged to have told authorities could run to $50bn (€36.8bn).