BlackRock plans hedge fund for U.S. retail clients

The new fund, BlackRock Core Alternatives Portfolio, will allow retail clients to mimic the investment patterns of pension funds and endowments, which have long favored hedge funds to both boost returns and guard against big declines.

Eligible investors can allocate $50,000 to the new fund and get a taste of hedge funds that traditionally require their clients to commit at least $1 million and often as much as $10 million.

Investors will be required to leave their money locked up for one year, the same period that many hedge funds require for direct investments.

The company did not say exactly when the fund would be launched, but indicated it would be during the first quarter of 2010.

BlackRock Alternative Advisors will provide the overall portfolio allocation, the company said, noting that they will give money to third party managers, as well as products managed by BlackRock, where appropriate.

BlackRock Inc bought Barclays asset management arm Barclays Global Investors earlier this month, making it the world's biggest money manager with around $3.2 trillion in assets.

(Reporting by Svea Herbst-Bayliss; editing by Andre Grenon)