Swiss bankUnion Bancaire Privée, which faces hefty losses in the alleged fraud of money manager Bernard Madoff, is threatening to pull several billion dollars of investments from large

US hedge funds because they do not use a full-time independent administrator, according to the Wall Street Journal.

The effort by UBP is notable because it is one of the world's largest investors in hedge funds, with about $124.5 billion of assets as of June last year. The Geneva-based bank has said it had about $700 million in Madoff-related investments through its funds-of-funds and client portfolios.

The list of managers UBP plans to withdraw money from includes some of the biggest names in the industry, such as James Simons's Renaissance Technologies; David Shaw's DE Shaw & Co; Steven Cohen's SAC Capital Advisors and Bruce Kovner's Caxton Associates. At least one fund has appointed an independent administrator, while others are adding new protections that fall short of that, which isn't likely to satisfy UBP, the WSJ said.

The Madoff case has rattled many investors, and an increasing number are pressing fund managers to appoint independent administrators to provide an extra level of security against fraud. Many investors and other industry specialists believe that independent administrators help guard against fraud by serving as a third party responsible for confirming that the hedge fund has the assets it says it does.

Administrators perform day-to-day duties associated with running a fund, such as handling money from new investors and calculating the value of the fund's assets. An administrator calculates the asset value based on data it receives directly from the fund's custodian, such as a bank, which physically holds the shares and other assets owned by the fund.

Jan Frogg, head of the alternative-asset-management group at UBP, was quoted by the WSJ as saying that the vast majority of hedge funds that the bank invests with already use an independent administrator. But within days of Mr Madoff's alleged scheme coming to light, it decided to require the practice of all of its managers. He said UBP currently is invested in less than a dozen funds that don't use an independent administrator, all of which are US-based.

"You need these things done independently to limit as much as possible instances of fraud or other irregularities," Mr Frogg said.