Top London hedge fund managers at London Diversified Fund Management shared as much as £46 million in pay and performance fees last year despite the fallout from the credit crunch lopping almost a third off the company's annual profits.

The payout to the managers was more than double the £21 million picked up by the company's top earner for the previous year.

It formed part of a total remuneration pot before costs and other expenses at London Diversified, a bond market investment specialist set up only six years ago, of just under £73 million.

About 24 company members qualify for a share of the payout, according to accounts filed at Companies House late last week.

The fund manager's three founding partners, Rob Standing, David Gorton and Mark Corbett, are likely to have taken the lion's share of the pay bonanza. Between them, the highest paid managers, paid through London Diversified Fund Management (UK) Limited received £45,852,228 last year.

London Diversified declined to comment on the payouts or its accounts.

The payday at London Diversified, which has about $4 billion under management, underscores how some in the hedge fund world continue to profit despite the gloom that has beset markets.

The accounts show that profits at the firm slid by 30.9 per cent from £105.6 million to £72.99 million for the year to the end of last August.

Management and performance fees fell from £129.1 million to £80.2 million over the period as the sub-prime mortgage crisis began to unfold last year and left valuations for some of its investments in tatters.

London Diversified has grown quickly since it was established in 2002 by Messrs Standing, Gorton and Corbett, each of whom used to work as fixed income and foreign exchange traders at JP Morgan.

The three were catapulted into the limelight in 2004 after they shared in a £55 million profits payout when the company had been in existence for little more than a year. At the time, this was one of the biggest ever payments notched up at a private British company.

The following year, employees at London Diversified shared a further £42 million, including the creation of a company-wide bonus pool of £25 million.

London Diversified was generating returns for investors of almost 20 per cent a year after fees were taken in to account. Hedge funds typically charge a 2 per cent management fee plus a 20 per cent performance fee.

Reports have suggested that more recent performance has been less stellar, with the firm’s $1.2 billion Select Fund thought to be down 17.1 per cent for the year to June.

While remaining notoriously secretive, hedge funds have gone to the heart of the City's establishment during the past few years.

Mr Gorton is one of nine directors and trustees in Absolute Return for Kids, the high-profile charity whose annual fundraising bash earlier this month raised more than £25.5 million in donations.

Mr Standing is one of 14 representatives on the Hedge Fund Working Group, set up last year to promote greater disclosure in the hedge fund market.

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