The first complete set of data on the full-year performance of hedge funds in 2008 confirms that despite breaking a run of six successive losing months in December, the industry endured its worst ever year as the financial crisis wreaked havoc across a swathe of strategies.

Funds of hedge funds were particularly hard hit in December as a result of their involvement in the alleged Madoff scandal, losing 0.2 per cent, 0.5 per cent lower than with no Madoff exposure.