For the second time in his still-young career, Eric Mindich is hitting it very, very big.

Mr. Mindich is opening a hedge fund he founded with capital commitments of $3.5 billion, believed to be the largest-ever fund launch.

The fund – Eton Park Capital Management – starts with $2 billion in the bank, a sizable portion of which is said to come from Harvard Management Company, the $19 billion endowment of Harvard University, according to sources familiar with the fund. Mr. Mindich was on the board of HMC until his recent resignation.

Mr. Mindich did not return calls for comment yesterday.

Mr. Mindich first made a name for himself on Wall Street in 1994 when Goldman Sachs made him its youngest partner ever, at 27. When Goldman Sachs went public in 1999, Mr. Mindich’s stake in the firm was valued at more than $100 million.

The economics of founding Eton Park make understandable his decision to resign a partnership at Goldman. To start, the fund will charge 2% of assets as a management fee and keep 20% of all profits. Once the additional $1.5 billion arrives, Mr. Mindich’s fund is guaranteed $70 million in annual management fees.

Moreover, with a $5 million minimum investment, Mr. Mindich is likely attracting only the most experienced and sophisticated institutional investors to Eton Park.

Mr. Mindich’s departure from Goldman is part of a broader trend among Wall Street’s dealers and investment managers; senior traders and portfolio managers are leaving for the chance to receive a guaranteed portion of their trading earnings. Earlier this year, Citicorp’s Ross Margolies, who was in charge of $3.25 billion in equity hedge funds, left to found his own firm.

In April, Rajiv Sobti, who managed more than $60 billion worth of bond investments for BlackRock Investment Management, left to head up a $600 million mortgage bond fund for Vega Asset Management.

Hedge fund officials who have read Eton Park’s offering circular or have been in touch with Mr. Mindich say the fund is structured into two components: a private-equity portfolio – representing 30% of the fund’s capital, or $1.05 billion – and a more liquid multistrategy portfolio, accounting for the other 70%, or $2.45 billion in capital with managers trading in convertible arbitrage, capital structure, and credit arbitrage and long/short equity strategies.

This year, the Hedgefund.net multistrategy index of 171 hedge funds is up 3.41%,down from last year’s 14.47% return. However, one individual who is familiar with the fund’s strategy said many of its initial trades are going to be in the capital structure, distressed and credit arbitrage sectors, where returns have been higher.

Eton Park’s private-equity portfolio will invest in the equity of non-publicly traded American and foreign companies. Thirty percent is considered an unusually high-percentage allocation to an asset that is difficult to value, nearly impossible to hedge, and totally illiquid. Ten percent to 20% is usually considered high, according to one fund-of-funds manager, who declined to be named.

Investing in companies that are not public is a high-risk, high-reward ven ture. A successful investment can return the initial outlay dozens of times over, but one must have the stomach to wait.

However, Eton Park’s investors cannot withdraw their capital for two years. After the second year, they can withdraw up to 33% annually for the next three years. Hedge funds that offer monthly redemptions run the risk of frequently having to sell their positions to raise the capital to meet redemptions. In turn, this selling often forces the portfolio manager to accept any price available, which can lock in losses.

As a result of Mr. Mindich’s redemption policy, he can guarantee his portfolio managers a large and constant capital base, which affords them a longer-term horizon than many of their peers. Hedge-fund industry officials said this could allow Eton Park to not only wait out down cycles, but could also make available to it a larger selection of potential investments, as companies traditionally prefer private-equity investors with longer time horizons than hedge funds generally have.

Also, one veteran hedge fund investor said Eton Park’s allocation of so much capital to private equity is a tacit acknowledgment that many of the long-standing and successful hedge fund strategies no longer offer compelling return opportunities by themselves. He cited the prevalence of hedge funds taking stakes in businesses, such as Edward Lampert’s ESL investment’s 52% stake in Kmart, or Duquesne Capital Management’s recent announcement that it had acquired a 6.4% stake in disgraced healthcare provider HealthSouth Corp.

Owning businesses such as Kmart has paid off for ESL’s Mr. Lampert. Last year he reportedly earned $420 million, placing him fourth among Institutional Investor magazine’s top 25 hedge fund earners. The top slot in the survey went to Soros Fund Management’s George Soros, who earned $750 million, as many of the long-term equity investments made by the Quantum Endowment fund appreciated.