Smaller hedge funds have outperformed their larger rivals over the last 16 years, according to an exhaustive study of over 20,000 funds by a team at the Imperial College of London.

The Risk Management Laboratory at the Imperial College of London's business school used figures from research providers BarclayHedge, EurekaHedge, Hedge Fund Research, Morningstar and Tass in a bid to confirm previously studied trends in the industry.