The University of California’s endowment, which manages $2 billion in hedge fund investments, plans to pull money from the worst-performing managers and redirect assets to top firms, the state system’s investing chief said.

The number of hedge fund managers will be cut to about 10 from 32 as soon as June, the latest move in a revamp of the university’s $95.7 billion in pension and endowment assets that began two years ago under Chief Investment Officer Jagdeep Bachher.

The university hasn’t determined whether it will also reduce its allocation to hedge funds in the endowment, which has $8.8 billion in assets, Bachher said Wednesday in an interview. The goal is to create “a simpler, leaner and cleaner portfolio” with better controls over management fees, he said.

“We care about returns,” Bachher said. “We care about risk. We care about cost and we care about transparency.”

Bachher informed the board that oversees the investment office on Feb. 26 about the reduction of hedge fund managers. “You give more money to the people who are doing well for you as opposed to spreading it out,” Bachher said at the meeting, according to a video posted on the university’s website.

Since Bachher took over, the California regents office has liquidated $10 billion of investments, including private equity and real-estate funds -- also redirecting that money to its best performing outside managers.

Hedge funds have been among the worst-performing assets for the endowment. They posted a 3.5 percent loss in the first six months of fiscal 2016 through Dec. 31, while the entire portfolio declined 2.5 percent, according to a report from the Feb. 26 meeting. Over a decade, hedge funds generated a 5.5 percent annual return versus 6.4 percent for the portfolio. Private equity holdings, by contrast, gained 4.2 percent in six months and 11.7 percent over 10 years.

Under Scrutiny

The largest allocation as of Dec. 31, 2014, was $147 million to BIWA Fund Ltd., according to the most recent data available. The fund is controlled by London-based CQS Management Ltd., a multi-strategy manager. The next largest was $109 million in a total return fund from York Capital Management, a New York-based multi-strategy investor.

The endowment’s hedge fund performance has come under scrutiny. According to a March 1 report from a union representing employees at the 10-campus system, the absolute return program launched in 2002 has failed deliver on a promise of producing returns at least commensurate with common stocks yet generated as much as $1 billion in fees for outside firms. Bachher declined to comment on the study.