The Thundering Herd is beating a path away from one of John Paulson's funds

Bank of America’s Merrill Lynch wealth management arm is pulling investor cash from one of hedge fund manager John Paulson’s funds.

Merrill, which is home to an army of financial advisers often referred to as the ‘Thundering Herd’, is liquidating client funds from Paulson & Company’s Advantage fund.

The news was first reported by the New York Times.

The redemptions total $US81 million, according to a person familiar with the matter. That is equivalent to around 4% of the fund’s roughly $US2 billion.

The wealth manager has offered clients the option of shifting their redeemed funds into Paulson & Co.’s more successful M&A fund, according to the person familiar with the matter.

Paulson’s special situations fund has also been put on “heightened review”, according to the person familiar with the situation. The New York Times report stated that the fund is now closed to fresh funds from Bank of America Merrill Lynch’s clients.

NOW WATCH: Mark Cuban explains why a 401(k) is a no-brainer

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.