Kenneth Heebner, manager of the top-ranked U.S. stock mutual fund, targets assets under management of $5bn for his first hedge fund.

According to regulatory filings, Heebner formed a private investment partnership in June called Wayfarer Capital LP. The size of the fund, which had raised $73m from wealthy investors and institutions, may vary from the target, Wayfarer Capital said in the filings.

Heebner's CGM Focus Fund, which manages $8.1bn, had an average return of 27 per cent a year during the past decade. In 2007 the fund returned 80 per cent.