Hedge funds are plunging into the race for the funds of the retiring baby boomers, offering an addition to the usual menu of stocks, bonds and mutual funds. They are adding new features to spice up their offerings making them more attractive than in the past. Fidelity Investments last year introduced "Retirement Income Advantage" accounts that allow retirees to consolidate their accounts.

Man Group added two products to its offerings that include a tax-exempt hedge fund that aims at attracting funds accumulated in IRAs. The best part of the offering is the low entry barrier, demanding only $25,000 in minimum investment. Besides, Man Group products will have quarterly liquidity that will allow investors to overcome their fears of uncertainty about hedge funds’ investment decisions. Hedge funds are gradually opening up to investors with less impressive incomes than a few years ago.

"Approximately 67% of household investable assets in the U.S. are controlled by households with over $1 million in net worth -- it’s an enormous market," Mr. Kelly said. "We want to build up a footprint across the country and are looking to attract lots of investors with smaller amounts rather than a few with larger amounts."

Man Group products are slow in accumulating assets: Man-Glenwood Lexington LLC and Man-Glenwood Lexington TEI LLC has only $128.4 million in assets under management on Dec. 31, 2004. But as the group is going to use 90 intermediaries and thousands of individual advisors to promote its funds, the managers hope for a large chunk of baby boomers’ funds.