British insurer Aviva will shutter a US-based hedge-fund arm by the end of the year after a major client asked for its money back, according to people familiar with the matter.

The Aviva unit, a so-called fund of hedge funds that invests money across a range of external managers, had roughly $2 billion under management and boasted relationships with some of the most high-profile firms in the industry including the activist investors William Ackman and Keith Meister, the people said.