Bank of America Merrill Lynch's China Chairman Liu Erfei will leave the bank to run the fund, the FT said, citing unidentified sources.
The move is a sign of BlackRock's growing footprint in Asia, where the asset manager has only a small presence outside of Japan, it said.
A spokesman for BlackRock in Hong Kong declined to comment while representatives for China's sovereign wealth fund, China Investment Corp <CIC.UL> were not immediately available to comment.
CIC, which managed $410 billion at the end of 2010, has obtained an additional $50 billion from China's central bank, sources told Reuters in February. It was set up in 2007 with a mandate to diversify part of China's foreign currency reserves into riskier overseas assets for higher returns.
(Reporting by Samuel Shen; Editing by Edwina Gibbs)