Hedge funds coffers were a little lighter last quarter thanks to negative performance, huge redemptions and forced liquidations.

According to HedgeFund.net, total assets in single manager funds fell 16% in the third quarter to $2.497 trillion. Performance losses accounted for $347.5 billion of the missing assets, while investor redemptions and liquidations accounted for an additional $128 billion. Investor redemptions alone accounted for an estimated $117.3 billion outflow, by far the largest on record.

Specifically, corporate bond strategies dropped an estimated $294.6 billion last quarter; long/short equity hedge fund assets fell an estimated $147.8 billion, emerging markets-dedicated hedge fund assets fell an estimated $84.3 billion and distressed investing strategies saw total assets fall an estimated $62.8 billion. Through the first three quarters of 2008, investors have actually added an estimated $11 billion more than they have withdrawn from distressed investing hedge fund strategies.

Fund of hedge funds also experienced a contraction in third quarter 2008, dropping $134.5 billion in performance losses, $75.7 billion in investor redemptions and $4.3 billion in net liquidations. All told, total funds of funds assets fell 14.9% to an estimated $1.224 trillion, the first ever-quarterly reduction in funds of funds FoF assets on record.

Early October estimates show the HFN Hedge Fund Aggregate Average, an equal-weighted benchmark of all single-manager hedge funds and managed futures products in the HedgeFund.net database, was down 3.85% in October and down 12.44% YTD.