The move follows a proposal from Marshall Wace, to convert the listed entity - which invests in the manager’s “Tops” hedge fund - into a UCITS fund, to be specially regulated under European Union law, the newspaper said.

Investors were meeting on Monday to discuss the transaction, with the majority favouring the winding up. Marshall Wace launched the fund in 2006. It was one of the first hedge fund firms to make available funds via listed markets, opening up access to this type of fund to investors beyond the ranks of institutions and high net worth individuals.

A problem that can be encountered by closed-ended fund vehicles, such as hedge funds, private equity funds and real estate funds, is that the share prices can trade at a discount to the underlying value of the portfolios. The discount to net asset value can sometimes be an opportunity for investors to buy into a fund at a cheap price; but if an investor has bought a fund when there was no discount and a gap subsequently appears at the time an investor sells the shares, then some of any potential returns will be lost.

Other large fund managers to have launched closed-end listed funds include Brevan Howard, Europe’s largest hedge fund, and BlueCrest AllBlue, a feeder into funds run by the $19 billion BlueCrest Capital Management, the report said.

“Converting a listed fund into an open ended-investment company regulated under the EU UCITS (Undertakings for Collective Investment in Transferable Securities) regime is a recognised way of satisfying the desire of shareholders to regularly trade their shares at net asset value in a product managed by the same manager," said Ronald Paterson, partner at Eversheds, the law firm.

"In order to achieve this, investors are having to accept some changes to the investment policy, including restrictions on the fund's ability to invest in unquoted investments and to borrow  and the UCITS fund will only take short positions synthetically and not directly.  Although the UCITS vehicle can be registered both inside the EU and outside it (for example in Switzerland) there are restrictions on the ability of US investors to follow their investment into the UCITS vehicle," he said.