Carrington Capital Management, a $1bn hedge fund specialising in mortgages, is trying to persuade its investors to lend it up to $200m to replace bank loans, in the latest sign of concern about banks pulling credit lines to hedge funds.

Carrington, part-owned by failed US subprime lender New Century, has offered investors an 18 per cent interest rate on new preferred shares it plans to issue.

Run, don't walk, to throw your money into a hedge fund started by the illustrious New Century?

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