The head of Deutsche Asset Management's multi-billion dollar hedge fund business is to join a former colleague setting up a hedge fund business with buyout firm The Carlyle Group in the latest blurring of distinctions between the asset classes.

Rick Goldsmith, who oversaw $7.3bn (€5.7bn) of hedge fund assets at Deutsche Asset Management, will join ex-colleague Ralph Reynolds at Carlyle, who is expected to join upon completion of talks over terms and conditions.