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One of Europe's largest funds slashes equity holdings

France's largest independent asset manager has slashed the equity holdings of its global funds on concerns the market may be underestimating weakness in the economic cycle and of indebted firms.

French fund manager Carmignac Gestion has cut its equity exposure in its 23 billion euro ($29 billion) flagship fund, which is the fifth largest mutual fund in Europe according to Morningstar, to 25 percent.

Read More'Weak and uneven': IMF cuts global growth forecast

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This is down from almost 48 percent in August and almost 50 percent at the start of the year.

Similarly, in the group's 6 billion euro ($7.6 billion) equity fund, exposure to stocks now accounts for 71 percent of the fund's holdings, down from almost 99 percent in August with the remaining 1 percent in cash, cash equivalents and derivatives.

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The group said it had "progressively" reduced its equity exposure in the past few weeks, adding that the "active management of the exposure level in these funds is usual and in keeping with their ambition is to deliver absolute performance to investors across economic cycles."

"Carmignac's concern is that the market may be underestimating the weakness of the current global economic cycle, and its impact on leveraged economies and companies," a spokesperson for the firm told CNBC.

European shares sunk to levels not seen since mid-August on Wednesday on concerns over global growth after the International Monetary Fund downgraded its outlook for global economic growth on Tuesday.

Read MoreOECD cuts US growth forecast, warns on risk assets

The IMF said it expects the global economy to grow by 3.8 percent next year, down from its July forecast of 4 percent, citing persistent weakness in the euro zone and a broad slowdown in several major emerging markets.

This follows the Organization for Economic Cooperation and Development's downgrade of U.S. and the euro area in September, where the Paris-based research group warned that risk assets appeared "mispriced".