NEW YORK — Merrill Lynch Investment Managers is preparing to launch a European hedge fund.

The fund, Merrill Lynch’s second such investment product, would adopt a bottom-up research process that takes advantage of in-house capabilities. Its first hedge fund, Merrill Lynch Equity Arbitrage, uses computer-driven quantitative analysis to take advantage of arbitrage opportunities. It was started in May and raised $31 million in its first six months.

Merrill Lynch now has $1.5 billion invested in hedge fund strategies.

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