The £23bn (€27bn, $38bn) Universities Superannuation Scheme, the second largest UK pension fund, is calling for hedge funds to appoint more independent directors to protect the interests of investors.

The USS plans to invest about £1.25bn in 25 single-manager hedge funds in the next two years as part of a strategy to double its allocation to alternative assets to 20 per cent. Currently, its only exposure to hedge funds is a £200m investment in replication strategies operated by State Street and Switzerland’s Partners Group.