Nevksy Capital has seen a $1 billion exodus from its flagship Nevsky hedge fund following news the firm’s two star managers, Citywire AA-rated Martin Taylor and Nick Barnes, are stepping down from it next spring.

The $7 billion hedge fund is unlikely to continue after Taylor and Barnes leave it, according to reports, and investors are already heading for the exit.

Despite the announcement, and the substantial hedge fund outflows, the pair’s other funds, Nevsky Global Emerging Markets and Nevsky Eastern European, have so far been unaffected. They are continuing to post positive inflows, according to Michael Warren of Thames River Capital, which owns the London-based boutique.

‘The Global Emerging Markets fund has seen strong inflows all year, nothing has really changed,’ said Warren. He added that Taylor and Barnes are still in demand, with many clients wanting their investments to be managed by the two fund managers.

Indeed, the Nevsky Global Emerging Markets fund remains a firm favourite among a number of leading European fund selectors. The fund was recently singled out as top picks by Maxime Pacan from Banque de Luxembourg, Tord Lundgren from JRS Asset Management in Sweden, F&C's Dean Cheeseman and Diren Gürtürk from Metzler Private Banking in Frankfurt.

Over the last five years the Nevsky Global Emerging Markets fund has returned 122% while its benchmark, MSCI EM (Emerging Markets) TR USD, rose 110%. In the same period the Nevsky Eastern European fund has returned 116% while its benchmark, MSCI EM Eastern Europe TR USD, rose only 59%.