Investors pulled close to a net $150bn from hedge funds in December in spite of moves by dozens of funds to halt or suspend redemptions.
The record December figure, equivalent to about 10 per cent of industry assets, extends the run of outflows to four consecutive months and has increased the total net outflow for 2008 to $200bn.
The size of the once lucrative industry has almost halved in the past year, to $1,000bn under management, according to data from TrimTabs Investment Research and Barclay Hedge.
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