(Bloomberg) – XL Group Ltd., the insurer with about $38 billion of investments, is reducing its exposure to hedge funds, Chief Executive Officer Mike McGavick said.

“We still do see some value there, but at this time we've seen it advantageous to rotate some of that money into different classes,” McGavick said Wednesday at an industry conference in Miami, without specifying which assets he was buying. “That has helped us with our investment yield.”

XL is among insurers including American International Group Inc. and MetLife Inc. that have shrunk allocations to hedge funds after years of high fees and performance that lagged benchmarks. Warren Buffett, whose Berkshire Hathaway Inc. owns insurers Geico and National Indemnity, has long slammed the money managers for a poor track record of returns.

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