UK hedge fund manager London Diversified made a profit of £32m (€37m) last year despite recording a 76% drop in its revenue, but has since had to cut staff as a result of investors taking their money away.

The firm, founded by former JP Morgan traders David Gorton and Rob Standing in 2002, saw its income fall from £141m to £34m in the year ended August 31 2009, according to the financial statements of London Diversified Fund Management LLP just published at Companies House.