Dalton Investments, a US investment management firm, has said it is winding down two of its eight hedge funds and returning their $300m (€240m) of assets to investors.

Both funds invest in distressed debt, typically bonds issued by companies that have subsequently gone into receivership. The global opportunity fund has generated 13.5% a year on average, net of fees, since launch in 1999. The distressed debt fund has made an average net return of 7.3% a year since launch in 2004.