The New Zealand Super Fund has suspended Milford Asset Management as one of its fund managers until an investigation by the Financial Markets Authority (FMA) is complete.
The regulator launched an investigation into one of Milford's traders in February, relating to certain trades.
A spokesperson for the Super Fund said it decided to suspend Milford because the investigation was taking a long time, and in the meantime it would manage the fund itself.
The FMA said it expected its investigation to be completed within the next few weeks.
"Our investigation does not relate to, or raise concerns about, the security or safety of Milford's client funds or assets."
In a statement, Milford said it was surprised at the Super Fund's decision.
Milford had looked after the $281 million fund on behalf of the Super Fund since 2009.
No further details about the investigation were available.