Louis M Bacon’s Moore Capital Management is planning to return USD2bn to investors due to ‘disappointing’ investment returns from its flagship hedge fund, Moore Global Investment Fund, over the past 18 months.

New York-based Bacon informed investors of his decision by letter stating that in the current economic climate ‘liquidity and opportunities have become more constrained’ and that he is ‘more comfortable’ reducing the size of the fund by what amounts to approximately 25 per cent, than ‘increasing the size of the positions’ to generate an ‘adequate return’.

Moore Global Investment, which charges a 3% management fee and a 25% performance fee, managed a return of just 0.35% for the first six months of 2012 but is up 6% in the last year.