William Ackman, CEO of Pershing Square Capital Management, has seen his hedge fund lose 12.6 percent for the year. Eduardo Munoz/Reuters

The third quarter of 2015 erased the greatest amount of wealth from hedge fund industry accounts since the financial crisis hit in 2008. Total capital under hedge fund management shrank by $95 billion amid global market turmoil stemming from a slowdown in China and continued uneasiness over U.S. interest rates, Hedge Fund Research said.

Worldwide, the industry still holds nearly $2.9 trillion in assets for rich investors, pension funds and university endowments hoping for an edge in financial markets. The decline in total assets during the July-September period was driven principally by the sagging values of hedge fund investments. The HFR index of hedge fund performance fell 3.9 percent in the quarter, compared with a 6.4 percent decline in the S&P 500 in the same period.

In the three-month period of market volatility, investors pulled $42 billion out of hedge fund holdings, but the outflows were more than offset by $48 billion of inflows. Unlike mutual funds and other investments, most hedge funds restrict when an investor can cash out.

Particularly hard-hit were hedge funds focused on energy and emerging markets strategies. Funds trading in Chinese assets fell nearly 16 percent in the quarter, buffeted by wild swings in China's equity markets. Funds with a short-selling focus, which bet on certain assets to fall in price, survived the quarter as the only strategy group with significant positive gains.

Some leading names in the hedge fund industry have reported big losses. Pershing Square Capital Management, run by activist investor William Ackman, has fallen 12.6 percent since the start of 2015. Larry Robbins' Glenview Capital Management has slid 13.5 percent this year.