Yale has withdrawn $500 million from a highly successful hedge fund it helped to found two years ago.

The University split with Children’s Investment Fund Management LLP because it was concerned that its stake in the $7.5 billion firm had grown too large, the Wall Street Journal reported on Wednesday. Yale must now find new venues for the money, but industry experts offered differing opinions as to whether the hedge fund industry — which helped the University multiply its wealth over the last two decades — is as friendly to institutional investors as it once was.

Children’s Investment Fund Management more than doubled Yale’s share since its founding in 2004, when the University invested $200 million. Hedge fund analysts said it is not uncommon for institutional investors to withdraw their money from high-performing funds after a certain period of growth.

In this case, the University may have decided to withdraw in order to preserve its long-term portfolio, said Justin Dew, a senior hedge fund specialist at Standard & Poor’s. Institutional investors have very specific ideas about how much of their money should be invested in each asset class, Dew said. The money in a particular hedge fund can grow so much that it exceeds the investor’s quota, he said.

“If you let everything kind of float, and didn’t sell winners and reallocate to your underperformers, then over time you would have a much different portfolio than you expected to have,” Dew said. “There has to be a constant reshuffling of the capital.”

The University Investments Office declined to comment.

Yale’s decision could also represent a change in strategy, said Zachary Bagdon, executive director of the School of Management’s International Center for Finance. The University’s endowment managers could be looking to get involved in other types of hedge funds, especially considering that few funds are able to maintain consistently exceptional performance every year, he said.

Children’s Investment Fund Management, also known as TCI, draws its name from an unusual pledge to build charitable donations into its fee structure. The fund tried to increase its fee for long-term investors in January, but withdrew the proposal after it received complaints, the Wall Street Journal reported. Still, the move probably annoyed Yale and other investors who are used to seeing fees decrease as funds grow, Bagdon said.

Economists have credited Yale, along with several other institutional investors such as Harvard University, for helping to popularized hedge funds in the 1990s. Though some experts warn that the industry is now on the decline, Yale’s 2005 endowment report states that the absolute return asset class — which includes hedge funds — remains an important part of its portfolio.

“In contrast with diversifying investments such as cash and bonds, absolute return strategies have excellent prospects of generating high long-term real returns coupled with low risk,” the report states.

The absolute return asset class is targeted to comprise 25 percent of the endowment, compared to 17.6 percent for the average educational institution. Yale’s allocation stood at 25.7 percent as of last June.

Dew said the effects of Yale’s withdrawal from TCI will most likely be limited. TCI’s success will make it easy to replace the University’s money with new investors, he said. Similarly, Yale will have little trouble reinvesting, even in the increasingly crowded hedge fund industry, Dew said.

“There are certainly plenty of opportunities to put $500 million worth of capital in the hedge fund space,” Dew said. “I think by and large Yale is looked upon as a preferred investor, and therefore I think a lot of managers would be open to having discussions with them.”

But Bagdon said Yale will find it more difficult to reinvest in hedge funds than in the past. The industry has been flooded with so much money that there are fewer market inefficiencies left to exploit, he said.

“It is harder to find the gems among the crowd,” he said. “As more hedge funds open, they compete for the same investment opportunities, making it increasingly difficult to achieve the types of returns that made the hedge fund industry famous.”

Yale’s $15.2 billion endowment currently outperforms its peers, sporting a 22.3 percent rate of return for last fiscal year.