Hedge funds clipped but London is still a winner

London is still home to five of the world's top 20 hedge funds despite a year that saw investors withdraw tens of billions of dollars from the sector as share prices and other financial assets plummeted.

A wave of withdrawals saw the total assets managed by Europe's top 50 hedge fund managers slashed from $405 billion (£255 billion) to $285 billion, a drop of 30%, according to Alpha magazine.

But within the industry there were clear winners and losers with many of the former based in London's hedge-fund neighbourhood of Mayfair. All of the top five European hedge fund firms are London-based. Brevan Howard headed the list with a rise in assets under management from $21 billion to $26.8 billion, enabling it to go up from third place last year. Man Investments rose two places to second with assets under management up from $20.9 billion to $24.4 billion.

However, the two top firms last year fell several notches with Barclays Global Investors down from first place to third with $17 billion under management. GLG partners slid from second place to eighth after its assets under management declined by 52%.

Fourth and fifth place went to Bluebay Asset Management and Bluecrest Capital Management.