Larry Summers thinks Sir Michael Hintze is mad. One of the world’s most successful hedge fund managers, Hintze tried to explain to the former US Treasury Secretary how the use of derivatives could allow investment managers to make double-digit returns for the foreseeable future, despite much lower economic growth. “Larry Summers looked at me as if I was some sort of lunatic,” jokes Hintze.

The founder of London-based CQS, which has more than $14 billion under management, Hintze is upbeat about an industry that has run into a renewed bout of criticism. A fresh debate about the industry's costs and returns was triggered when Calpers, the giant US pension fund, announced plans to dump all its hedge fund holdings.