NEW YORK (Bloomberg) — Investors withdrew a record $89.2 billion from money-market funds yesterday after Reserve Primary Fund became the first in 14 years to buckle under losses.

Institutions pulled $129.9 billion from accounts that can hold company debt while putting $47.2 billion into those that buy only U.S. Treasuries and government-agency securities, according to data compiled by Money Fund Report, a Westborough, Massachusetts-based newsletter. Individuals withdrew $3.8 billion from funds that can invest in commercial paper and deposited $1.67 billion into government funds.

The 2.6 percent decline in money-market assets to $3.35 trillion came a day after Reserve Primary said its net asset value fell below $1 a share, a situation known as breaking the buck that leaves investors exposed to losses. It is only the second fund, and the first since 1994, to break the buck.

The fund, run by New York-based Reserve Management Corp., lost more than 60 percent of its assets to redemptions on Sept. 15 and 16. It held $785 million in debt issued by bankrupt Lehman Brothers Holdings Inc.

Putnam Investments LLC said it closed its $12.3 billion institutional Putnam Prime Money Market Fund yesterday after an undisclosed amount of withdrawals. The Boston-based company said the fund closed at $1 a share and would return all cash to investors.

Lehman, once the fourth-largest U.S. investment bank, filed for Chapter 11 bankruptcy on September 15.

Money-market funds, considered the safest investments after US Treasury debt and bank deposits, strive to preserve the $1 a share net asset value, meaning that investors can always get back their principal.