UPDATE 2-BlackRock hires Credit Suisse exec to bolster hedge fund unit

(Adds departure of direct investing team, BlackRock comment)

March 22 (Reuters) - BlackRock , the world's largest money manager, hired Andy Stewart, the head of one of Credit Suisse's hedge fund units, to bolster its own alternatives business as it shutters a direct private equity strategy.

Stewart will co-head New York-based BlackRock's hedge fund and private equity division alongside current leader Matt Botein, who will take on the additional title of chief investment officer for alternatives, the firm said in a memo on Friday.

At the same time, BlackRock is closing down a direct private equity investing team it hired in 2011 which had run a similar business at Merrill Lynch. Nathan Thorne, George Bitar and Mandy Puri will leave the firm, spokesman Brian Beades said.

"We had a very strong direct private equity team but given our clients are looking to us for other fund of fund solutions, we are going to transition out of the direct PE business," Beades said in a statement.

BlackRock Alternative Investors, or BAI, oversaw $110 billion of the firm's nearly $4 trillion of total assets at the end of 2012. Last year, investors withdrew $5.5 billion more than added to the unit's offerings. The acquisition of Swiss Re Private Equity Partners, announced last July, added about $7.5 billion.

Under the new structure, Stewart will focus on managing operations and business development while Botein will focus on investment performance and oversight, the staff memo from BlackRock President Robert Kapito and Chief Operating Officer Charles Hallac, said.

"These changes broaden the leadership structure of BAI as we seek to grow our investment and business management functions, as well as our client service capabilities," the memo said. There were no immediate changes to portfolio managers or account teams, the memo said.

Stewart previously headed Credit Suisse's liquid alternatives group which encompasses hedge fund, fund of hedge funds, index, credit and commodities products. He was formerly president and chief operating officer in the United States for Man Investments.

Credit Suisse declined to comment.

(Reporting by Aaron Pressman in Boston and Lauren LaCapra in New York; Editing by Bernard Orr)

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Keywords: BLACKROCK ALTERNATIVES/