The head of the working party set up to review best practice among European hedge funds has moved to distance the industry from the political furore surrounding private equity, as he admitted the overhaul may take longer than originally planned.

Hedge funds, together with private equity firms, have faced criticism from some quarters over their role in the financial markets, and some of the world's biggest private equity firms in March created a taskforce to devise a code of best practice under the leadership of another Bank of England alumnus, Sir David Walker.