A team of 12 hedge fund managers led by Davide Erro, a star trader, is set to leave Deutsche Bank to set up their own business running a $1bn (€780m) fund in Hong Kong.

A prime broker said Erro intended to open his new firm, Gandhara Capital, in a few months. A former colleague of Erro's said it would focus on Asia, particularly Japan. Sources at Deutsche Bank confirmed Gandhara Capital was hoping to open its initial fund with $1bn.