Clare Flynn, Robin Garrow and Andrew Gibbs were among the most high-profile departures from traditional fund managers to the high-fee world of hedge funds last year. The year 2000 saw more than 20 star managers from conventional long-only funds take this road.

New pools of funding from incubators has made the transition easier. Marshall Wace Asset Management is a hedge fund set up by Eureka Strategic Partners to seed talented managers. Robin Garrow, former head of strategy at Scottish Widows Investment Management, has set up Kestral, part of Argyle Investment Advisors' hedge-fund umbrella which has been seeded with $1m. Clare Flynn, a former Deutsche Asset Management fund manager, will launch Avocet, a European technology hedge fund, this month.