BlackRock starts funds of hedge funds IPO in London

NEW YORK, March 28 (Reuters) - BlackRock Inc (BLK.N: Quote, Profile, Research, Stock Buzz) launched a $500 million initial public offering for a fund of hedge funds to trade on the London Stock Exchange, the Wall Street Journal said in an article on Friday.

The fund, BlackRock Absolute Return Strategies Ltd, will provide investors access to its so-called Appreciation Strategy of investing in pools of hedge funds, which it acquired last year as part of its purchase of the funds-of-funds business of Quellos Group LLC, the Journal said.

A spokesperson for BlackRock could not be reached for immediate comment.

BlackRock Absolute Return Strategies will aim to generate 6 percent over the 3-month London interbank offered rate each year, the Journal said.

Funds of hedge funds select and manage portfolios of individual hedge funds, spreading their risk among a dozen or more funds. Most are open only to wealthy individuals and institutions. However, about 30 funds that are listed in London provide anyone who can buy shares, access to hedge funds that otherwise would require large minimum investments and lengthy lockups of capital.

At $500 million, the fund would be one of the largest of the listed funds. Closed-end funds can trade at a premium or discount to their net asset value.

(Reporting by Ilaina Jonas, editing by Richard Chang)