LONDON — Mellon Financial Corp., which is starting a hedge fund group in Europe, announced Monday that it has hired two executives away from another European fund group to run the business.

Derek Stewart and Scott MacDonald, both 32, will focus on setting up a hedge fund of funds for the Pittsburgh banking company at Mellon Global Alternative Investments Ltd. They will be based here and have the title of director.

Mr. Stewart was director and Mr. MacDonald assistant director of hedge fund management at Liberty Ermitage. Before that, Mr. Stewart was research director at Key Asset Management. Mr. MacDonald was previously at Morgan Stanley Dean Witter & Co. and later joined Key Asset Management.

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