Carlyle Group, one of the world's biggest private equity firms, has confirmed that its £11 billion Guernsey-based fund had gone bust after banks refused to support a refinancing package. Carlyle Capital Corp, a hedge fund that invested mostly in two US mortgage lenders, was shut down. Carlyle, based in New York, said the fund had "not been able to reach a mutually beneficial agreement to stabilise its financing". CCC's shares were almost worthless after the company's problems became public last week. A spokeswoman said the fund would be wound up and assets returned to its main lending banks. A jump in short-term interbank loan rates - making it more costly for banks to borrow from each other - put pressure on lenders to claw back cash from hedge funds and private equity groups. A number of other hedge funds are close to collapse, according to a number of press reports on Friday. Funds in difficulties include Drake Management, a US investment house, which has told investors in its $3 billion Global Opportunities Fund that it was consider shutting it down. The fund has already halted client redemptions.