Blackstone Group LP, one of the world's biggest hedge fund investors, said on Monday Fidelity Investments is a strategic partner in giving retail investors a taste of the normally exclusive world of hedge fund investing.

Boston-based Fidelity's Portfolio Advisory Service (PAS), a managed account offering, has begun investing in the Blackstone Alternative Multi-Manager Fund.

PAS clients are Fidelity retail investors with a minimum account of $50,000, who get access to some of the best outside money managers hired by Fidelity's Strategic Advisers unit.

Launched last month, the alternative mutual fund is run by Blackstone's hedge fund unit and advised by nearly one dozen hedge funds, including Wellington Management, Two Sigma Advisers, HealthCor Management and Good Hill Partners, U.S. regulatory filings show.

The fund's net expense ratio of 2.40 percent is more than twice as expensive as a typical mutual fund.

But the Blackstone fund is without some of a hedge fund's restrictive features. It offers daily redemptions and a chance for retail investors to get exposure to the bread-and-butter of hedge fund investing such as troubled debt, commodity speculation and shorting stocks.

A pure hedge fund will charge more, put restrictions on redemptions and open its doors only to sophisticated investors.

Strategic Advisers is part of Fidelity's $451 billion global asset allocation division. PAS is the largest mutual fund advisory wrap program in the managed accounts industry with $104 billion in assets under management at the end of June.

Blackstone's so-called hedged mutual fund is the second of its kind to be introduced into Fidelity PAS, which also invests in the Arden Alternative Strategies Fund.

"Given the complexities associated with bridging the gap between mutual fund regulations and hedge fund strategies, we are very happy with the Fidelity relationship," said Tom Hill, who runs Blackstone's hedge fund group.

Best known as a private equity business, Blackstone's hedge fund unit, Blackstone Alternative Asset Management, boasts strong industry credentials, having invested $49 billion with prominent firms including Pershing Square and D.E. Shaw & Co, and seeding newcomers like Marcato Capital Management and Bow Street LLC.

(Reporting by Tim McLaughlin; Additional reporting by Gregory Roumeliotis; Editing by Gerald E. McCormick and Nick Zieminski)