BlackRock, the US asset manager part-owned by
Merrill Lynch, is to launch a European version of its UK Absolute Alpha fund at the end of the first quarter.

The fund, which will likely be named the BlackRock European Absolute Alpha fund is to be managed by Vincent Devlin, who has managed the firm’s Continental European fund since joining from Scottish Widows Investment Partnership at the beginning of 2008.

Mr Devlin will be assisted in running the fund by the 14 members of BlackRock’s European Diversified team.

Mark Lyttleton, manager of the UK Absolute Alpha fund, has been involved in an advisory capacity in setting up the new fund, but will not be taking part in its day-to-day management. Mr Lyttleton’s fund generates around 50 per cent of returns through pair trades, although these will account for only 20 per cent of returns in the European Absolute Alpha fund.

BlackRock has performed stress-testing on the fund’s style to ensure sufficient liquidity and risk management, and the firm says that between June and December a model version of the portfolio returned 5 per cent.

The fund manager is also thought to be launching another fund that will be Luxembourg-domiciled. Both launches are subject to regulatory approval. 

BlackRock manages assets for institutions and individuals through a mixture of equity, fixed income, cash management and alternative investment products. At 30 September 2008, BlackRock’s assets under management stood at $1.259 trillion.  The firm, which is headquartered in New York, operates across 22 countries.