Arcilla, who was co-head of investments and ran more than $7.5 billion at EIM, will be Global Head of AXA Funds of Hedge Funds and replaces Chris Manser, who left the group earlier this year, the firm said on Monday.

Arcilla's appointment comes at a tricky time for hedge funds, which have lost 8.14 percent in performance terms this year, according to Hedge Fund Research's HFRX index, as they struggle to cope with choppy markets buffeted by a deepening euro zone crisis and fears of a global recession.

Funds of hedge funds -- which hold a basket of these freewheeling portfolios -- have also struggled, after underperforming individual hedge funds and suffering outflows in recent years.

Arcilla told Reuters in an interview that the group may start to offer more tailor-made funds to bigger investors.

"When a large institutional investor has a specific requirement, we should be able (to meet that). It might mean building more portfolios," he said.

Arcilla, who starts on Monday, will report to Thibaud de Vitry, a member of AXA IM's management board. AXA IM is part of French insurance group AXA.