London | June 29

FT - The retreat from risk in global credit markets gathered pace on Thursday as investors demanded stricter terms for high-yield bond issues and a London hedge fund said it would wind down after suffering big losses on US subprime mortgages.

Caliber Global Investment, a London-listed fund, said it would sell its assets and return capital to investors after a review found “insufficient demand currently” for exposure to the subprime mortgage market. The review was triggered by an $8.8m (£4.4m) net loss from subprime investments.

The $900m fund will wind down over the next 12 months. It is managed by hedge fund Cambridge Place Investment Management, whose founders included Martin Finegold, founder of subprime lender Kensington Group.

Carlyle Group, the US private equity company, also delayed – at the last minute – the flotation in Amsterdam of an investment fund dealing in residential mortgage-backed securities in order to cut the offer price because of market volatility.