Troubled hedge fund JWM Partners, founded by John Meriwether has made more than 10 people redundant.

Several staff have gone from its London office, which employs 17 people, and up to ten at its New York base.

Two partners based in London are also quitting.

A source at the company said that the cuts were part of adjusting to current market conditions.

JWM Partners was set up by Mr Meriwether in 1999 after his previous venture, Long-Term Capital Management, collapsed losing $4billion (£2billion). It was bailed out by 14 US banks and resulted in US congressional hearings on the dangers of hedge funds. JWM suffered last week when investors withdrew funds from its Global Macro Fund after its value fell by 14 per cent in the first three months of the year.

Its leading product, Relative Value Opportunity fund, fell by 31 per cent in the first quarter of the year. It was hit badly by its investments in Japanese government securities. However, it is believed that JWM's performance improved in April.

JWM has a total of $1.6billion (£800 million) under management.

A growing number of hedge funds are struggling with increasing redemptions and drops in assets under management, due to poor returns under current lacklustre market conditions. Last month Peloton Partners, founded by former Goldman Sachs partners Ron Beller and Geoffrey Grant, said it was liquidating its two funds. Carlyle Capital Corp (CCC), a $21 billion fund managed and co-owned by Carlyle, the giant US private equity group, also collapsed after it failed to meet margin calls from banks.

JWM refused to comment.

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