Rhode Island will no longer be on the roster of clients of Third Point Llc after its pension fund decided that the hedge fund of billionaire activist investor Daniel Loeb was too risky for comfort and decided to redeem its money, Reuters reported.

According to Rhode Island Treasurer Gina Raimondo's  Spokeswoman Joy Fox, the Investment Commission has unanimously voted to pull out its $74.3 million invested into Third Point. The Investment Commission directs how Rhode Island will invest its pension fund worth $8 billion. The money is set to be given back to the state on March 31, the report said.

In an email sent to Reuters, Fox said, "The purpose of the hedge fund portfolio is to reduce the (pension) fund's overall sensitivity to equity market moves. This fund has the highest equity market sensitivity within the state's hedge fund allocation. With this vote, the commission is further reducing the beta risk within this portion of the portfolio."

The investment of Rhode Island is quite small when viewed in light of Loeb's $14 billion Third Point. It won't also make a dramatic impact on the hedge fund which has been considered as one of the best performers in the industry. However, hedge fund managers typically don't want to lose pension fund clients since this could be detrimental to how other institutional clients view them, the report said.

State documents revealed that last year, Rhode Island earned a return of 24.71% under Loeb. This placed Third Point as its best performer in that time period. The total return of the pension fund for the year was 14.01%, the report said.

Rhode Island's first investment of $50 million in the New York-based fund was made in 2012. The state was able to earn a 49% return on that investment with the fund's robust performance in 2012 and last year, the report said.