Shares of Blackstone Group (BX) gained strength on Friday morning on reports that China Investment Corp (CIC) was mulling injecting as much as $500 million in the hedge fund.

Citing people close to the matter, the Wall Street Journal said the Chinese sovereign wealth fund is also looking at other hedge funds in the U.S., including Eton Park Capital Management and Paulson & Co., as part of its efforts to mobilize cash as global markets show signs of bottoming out.

CIC was set up in 2007 and currently controls assets worth roughly $200 billion. The fund had become wary of foreign ventures after initial investments in Morgan Stanley (MS) and Blackstone ended in steep losses during the economic crisis. But it seems CIC still has faith in the prospect of these firms. It bought an additional $1.2 billion shares in Morgan Stanley earlier this month.

Although it is not certain how much CIC intends to allocate to the hedge funds, reports claimed that the estimated figure could be around $6 billion by the end of 2009. On Friday, industry experts saw the news as a positive development and as an indication that more foreign wealth funds could open up their coffers for investment in the U.S.

Shares of Blackstone were up more than 3% to $11.50 at noon on the New York Stock Exchange after touching at intraday high of $11.61 earlier in the session.

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