Mega buyout funds have been a bad bet over the past year, generating the worst returns when compared with small and mid-market funds, a study by research firm Preqin said on Tuesday.

Funds larger than $4.5 billion made a negative return of 31.4 percent for the calendar year to June 2009, the report said. For the same period, mid-market fund returns were down 16.7 percent, and small buyout funds had negative returns of 12.9 percent.

Large buyout firms struggled to finance substantial deals after the credit crunch, and investors have been far more hesitant to commit to such funds.

Not only has financing for new deals been an issue, but financial management for existing investments has also presented a major worry, London-based Preqin said in the report.

Mid-market and smaller buyouts funds are currently providing more appeal, it said.

Mega buyout funds are also providing the worst returns over a three-year period, down 3.1 percent, while large, medium and small buyouts all posted positive returns, Preqin said.

(Reporting by Megan Davies; Editing by Tim Dobbyn)