The private equity industry suffered its worst year on record in 2008, as its investments lost almost 30 per cent of their value, according to research published on Thursday that underlines the woes of the once-mighty buy-out groups.

One-year returns for the private equity industry fell 27.6 per cent last year, far more than the 9.1 per cent drop that the industry suffered in 2002 after the dotcom bubble burst, said Preqin, the research firm.