Former BlackRock fund manager Mark Lyttleton was arrested last month on suspicion of insider trading, according to reports.
BlackRock is merging its UK Dynamic fund with its UK fund as part of a wider UK equity overhaul as Mark Lyttleton resigns from the group.
BlackRock's absolute return manager Mark Lyttleton is due to return to his post next week after an extended break from the industry.
BlackRock's Nick Little is to join Mark Lyttleton in managing the company's £444m UK fund.
BlackRock's Mark Lyttleton has cut his banking exposure on concerns a heavier burden of regulation and increased capital requirements are clouding the outlook for the sector this year.
Mark Lyttleton, co-manager of the Blackrock UK Absolute Alpha fund, and Ed Fishwick, the group's quantitative risk analysis group, discuss the fund's investment process.
Absolute return funds returned to form in the second half of 2010, after a period in which many failed to deliver, says Standard & Poor's Fund Services.
BlackRock's Mark Lyttleton is looking to increase exposure to banks in his £1.4bn UK Dynamic fund in the view valuations are attractive again.
Mark Lyttleton has built up short positions in Schroders and Aberdeen in his £2bn BlackRock UK Absolute Alpha fund.
BlackRock's Mark Lyttleton has opened a short position on Legal & General as the manager continues to be bearish on the insurance sector.