Reflecting record investor withdrawals of over USD150bn in Q4, 778 funds liquidated during the period, more than doubling the previous quarterly record of 344, set just one quarter earlier in 3Q08.

The total number of liquidations in 2008 was 1,471, an increase of over 70 per cent from the previous full year record of 848 liquidations set in 2005.

The fourth quarter also saw a sharp drop in the number of new funds launched, with only 56 launches for the quarter versus 117 funds launches in 3Q08, although 659 funds launched over the calendar year. The launch total for the full year was the lowest since 2000, when 328 funds launched.

Hedge Fund Research also found that 2008 was a record year for performance dispersion across the hedge fund industry, with nearly 100 percentage points separating the top decile of performers from the bottom decile.

Despite substantial transition across the brokerage industry, the top three prime brokerage firms continue to control more than 62 per cent of all industry capital.

More than 275 fnds of hdge fnds were liquidated in 2008, also a record.

On a net basis, the total number of hedge funds declined by about eight per ent in 2008, to 9,284.

'After years of steady growth, 2008 was a record year for hedge fund liquidations, reflecting in part the transitions occurring across many aspects of the overall financial industry, as well as the substantial performance dispersion between hedge funds,' saysenneth J. Heinz, president of Hedge Fund Research (pictured). 'As the industry evolves to suit investor demand, trends in strategy preferences, service providers, disclosure and transparency are likely to shape the industry landscape for the foreseeable future.'