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Highbridge Poaches Fidelity Manager

William Eigen managed about $10 billion at funds including the Strategic Income Fund.

Highbridge Capital Management, the $8 billion New York-based unit of

J.P. Morgan

, became the latest hedge fund Thursday to make a high-profile poach from Fidelity Investments.

William Eigen, who managed about $10 billion at Fidelity across various long-only funds including the Strategic Income Fund, joined Highbridge to manage a fixed-income fund. His departure is no small victory for Glenn Dubin and Henry Swieca, co-founders of the behemoth hedge fund that was acquired last year.

It isn't unusual for hedge funds to hire away up-and-coming Wall Street stars. Increasingly, however, they are tapping into mutual fund talents. Although not entirely new -- Jeffrey Vinik left Fidelity's Magellan fund a decade ago -- the trend represents the growing importance of long-only strategies to hedge funds.

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Last week, David Baverez and Krishnan Sadasivam, who jointly managed $2.2 billion of European stocks for Fidelity in London, quit their job to run a long-only hedge fund seeded by activist manager TCI Fund Management. Chris Hohn, TCI's founder, is investing his own capital in a long-only fund, and he is not alone. Other well-known hedge funds have recently launched long-only funds, including Lone Pine Capital and Ospraie Management.

Another variety of the long-only strategies are the activist funds that have been gaining favor, including Carl Icahn's High River fund, which has about $2 billion under management.

"I don't know what a hedge fund is anymore," says one senior official at a prominent hedge fund.

The trend toward long-only strategies reflects the difficulty managers have had finding lucrative short candidates in the current market as well as the paucity of managers who can work the art well.

Still, for Ken Kinsey-Quick, Thames River's head of multistrategy managers, branching into the long-only universe is a business decision that has nothing to do with performance. "They are trying to diversify their business and to build a brand," he said. The average pension has less than 1% of its assets in hedge funds and only about 5% in alternative assets, he notes. From that standpoint, tapping into the traditional equity market makes a lot of business sense.