Hedge funds are coming to the end of a fifth consecutive year of underperforming the S&P 500 index. The Federal Reserve’s stimulus programme pushed the index up 29.1% this year through November, leaving the average hedge fund, which is up 8.31% this year, trailing. In an environment of rising equity markets, shorting stocks proved difficult and short-biased hedge funds dropped 15.87% in the first 11 months of this year, according to data provider HFR.

A partner at a large London hedge fund said: "In aggregate, hedge fund performance this year has disappointed."