The California Public Employees' Retirement System (Calpers), the largest pension fund in the US, has parted company with Financial Risk Management. Its decision comes just six months after choosing the firm to advise on hedge fund investments as clients increasingly question the high fees charged by advisers.

FRM runs a fund of hedge funds programme and, with UBS O'Connor and Pacific Alternative Asset Management Company, was selected last year by Calpers to provide access to underlying hedge fund managers and carry out research on potential new investments.