Calpers, which manages retirement and health benefits for more than 1.6 million public employees in California, said Monday that it plans to divest the $4 billion it currently has spread across 24 hedge funds and six hedge fund-of-funds “as part of an ongoing effort to reduce complexity and costs” related to its investments.

With roughly $300 billion in assets, the agency says the decision to turn away from hedge funds came after an evaluation of the Calpers investment portfolio, including the hedge fund program called Absolute Return Strategies (ARS), suggested the investments were no longer cost-efficient. “Hedge funds are certainly a viable strategy for some, but at the end of the day, when judged against their complexity, cost, and the lack of ability to scale at Calpers’ size, the ARS program is no longer warranted,” Ted Eliopoulos, Calpers’ interim chief investment officer, said in a statement.

Calpers’ stated goal is an annualized rate of return of 7.5% on its investments of public funds, but Bloomberg points out that the agency’s hedge fund investments have only brought back 4.8% over the past decade.

In its announcement, Calpers said it will be “strategically exiting” the hedge fund investments over the next year or so, while current ARS employees will be reassigned within the agency’s investment office.

Calpers is not the only large public pension manager to invest with hedge funds, which are known for hitting clients with high fees. The practice has especially taken off over the past decade. Fortune reported in 2011 that the number of public pension funds allocating money to hedge funds had increased my more than half since 2007. For instance, public pension funds for Texas teachers and Ohio school employees have as much as 10% to 15% of their money invested in hedge funds while, in New Jersey, Governor Chris Christie has come under fire for the exorbitant fees paid to hedge fund managers from the state’s pension funds in recent years.