Four founding partners of the Citigroup hedge fund Old Lane, closed in September 2008, among them its former chief executive Guru Ramakrishnan, are involved in one of the largest US hedge fund start-ups of the year, according to the Wall Street Journal.

New York-based Meru Capital Group is under way with around $300 million in capital, more than $75 million of that from Mr Ramakrishnan and partners, according to the unnamed sources.

Meru Capital’s origins lie in Morgan Stanley, where Mr Ramakrishnan was head of global equity trading until he left in 2005, as did Vikram Pandit, now chief executive of Citigroup.

Three other Meru principals - Jonathan Barton, Jeff Moskowitz and Ajay Khanna - also worked in trading or securities-financing roles at Morgan Stanley and were connected to Old Lane.

This is the latest in a number of hedge fund start-ups to suggest that these funds, which suffered record losses in 2008, have recovered some of their appeal to investors.