An Australian pension fund has become the latest client to terminate its investment management contract with Bank of Ireland Asset Management (BIAM).

The Construction and Building Industry Super has withdrawn the 280 million Australian dollars (€161.6 million) in funds it had under management with BIAM, adding to the steady trickle of clients moving their monies to other fund managers.

"We are very sorry to see them go. They have been a very valued client," a BIAM spokeswoman said yesterday.

The Australian pension fund's decision appears to have been prompted by advice from its asset consultant, Frontier, to change manager following the departure of four key BIAM investment managers in October.

The four were headhunted by Perpetual Investments to take charge of its new Irish-based fund management business.

The staff defections and BIAM's investment performance have prompted mostly US-based clients to withdraw some €5.7 billion of investment funds in the period from March to September. In all, BIAM has around €50 billion under management.

The steady haemorrhage of client funds may not yet be at an end as a number of other funds continue to monitor BIAM's performance.

Worryingly for the Bank of Ireland unit, Frontier is believed to be adviser to three further BIAM clients which are currently reviewing their mandates.

Those who have removed investment mandates from BIAM include the State Retirement and Pension System of Maryland, which had $1.8 billion (€1.34 million) with BIAM, the San Mateo County Employees' Retirement Association and the Colorado Public Employees' Retirement Association, for whom BIAM managed $495 million.

In mid-October, BIAM withdrew from actively managing $600 million in international equities for the world's largest pension fund, the California Public Employees' Retirement System, after the fund put the firm on its watch list.