Peter Clarke, CEO of hedge fund manager Man Group Plc said on Tuesday that banks were more highly geared than hedge funds and bank deleveraging had been the main driver of asset-price declines.

"Hedge fund deleveraging has put pressure on asset prices as clients have redeemed. But the main point is banks are deleveraging and they are many times more leveraged than hedge funds," he said.

Speaking at the Hedge Funds World conference in Zürich, Mr. Clarke also said leverage across the hedge fund industry is now at around a third of leverage levels in 2007. He said he expected hedge fund outflows to continue into the first quarter of 2009, but would end there.

He expected institutional inflows to pick up in the second quarter of 2009.