Hedge fund GLG Partners said Italy's Banca Fideuram, a private bank, has awarded it a contract to manage $3 billion for its asset management division, a move that will increase GLG's assets to about $27 billion.

The London and the New York-based hedge fund group said it will manage three 130/30 portfolios – which blend long and short market positions. The asset management division of Banca Fideuram will provide retail investors access to hedge fund-like investment flexibility within the European Union rules.

The accounts are expected to fund late in the third quarter of 2008 with initial assets of approximately $3 billion. The management fees charged will be at institutional levels but have a performance fees override which will be earned on any excess performance generated relative to the underlying benchmark equity indices.

Banca Fideuram, a unit of Intesa Sanpolo, has $250 million invested with GLG. Banca Fideuram had about €65.5 billion  ($101.8 billion) in assets under management as of 31 March.