LONDON—Blackstone Group LP is said to be in negotiations to back a Hong Kong-based distressed fund started by a former global head of Goldman Sachs Group Inc. Special Situations Group.

Bloomberg News says the fund, Arkkan Capital Management Ltd., started by GS alum Jason Brown, will concentrate on Asian opportunities with the flexibility to invest globally. Bloomberg said the information came from multiple sources who asked not to be identified.

It would be the second time Blackstone backs an Asia-based hedge fund since the 2008 global financial crisis.

Arkkan is said to be enlisting support from the world’s largest manager of alternative investments to help attract other big institutional investors. Blackstone’s backing of Hong Kong-based Senrigan Capital Group Ltd. allowed it to grow assets to more than $1 billion in less than two years.

Peter Rose, a New York-based Blackstone spokesman, declined to comment.

New funds in Asia raised an average $20 million each in the first half, according to Singapore-based data provider Eurekahedge Pte.

From 2011, until last year, Brown was the head of Goldman Sachs’s global Special Situations Group, which invests in distressed debt and companies.

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