Blackstone, the world's largest independent alternative asset manager, is planning to be a $10 billion hedge funds player by building a "flagship fund" that would be either a long/short equity or multi-strategy fund.

John Dionne, a former partner at Bennett Restructuring Funds, a $1 billion hedge fund, joined Blackstone earlier this year to run its distressed debt fund, which will be the first stage in the build up to the flagship hedge fund.

Blackstone has recently raised huge assets in both private equity and real estate funds.

It will soon close the world's largest private equity fund at about $13 billion. The group has a further $13 billion in other funds.