Two high-profile hedge funds have been forced to freeze investor redemptions after the underlying managers in their portfolios were hit by investor withdrawals and liquidity problems in a move that could have wider consequences for the industry.

Goldman Sachs JBWere and Select Asset Management have both halted redemptions over the past week in certain fund of hedge fund offerings (a collection of different hedge funds held in one portfolio) as hedge funds globally are being squeezed by the credit crisis.