The managers of Galleon's $500 million Asia fund are exploring a possible buyout of the unit, sources told Reuters on Thursday, as the Singapore-based traders strive to keep investors on board after redemption requests.

This is a sign that global managers and analysts at U.S.-based Galleon Group are seeking an independent course for themselves, after the hedge fund's founder was charged with insider trading.

Management buyout is the most logical option, said one of the sources, who declined to be identified because the talks were not public.

The development in Asia came after Galleon Group's founder Raj Rajaratnam told employees and investors on Wednesday that the $3.7 billion fund was winding down. It has attracted potential buyers, a source familiar with the matter said.

The regional management in Singapore, including chairman Frank Wong and CEO David Lau who were both considered top traders when formerly at Singapore's biggest bank DBS Group , is trying to attract outside investors to participate in the buyout.

One of sources said the Galleon Asia fund, which focuses on long/short equity and macro strategies, has already received some redemption requests.

Pressure on Galleon has mounted since its founder Rajaratnam and five others accused were arrested on Friday.

By Monday, investors had asked the firm to return $1.3 billion. Under ordinary circumstances, investors would have to notify Galleon by the middle of November of their plans to exit, and they would get their money 45 days later, in early 2010.

Lau told Reuters in an interview on Wednesday that the Asia fund had reduced leverage and was staying liquid ahead of likely redemption requests.

Soon after Rajaratnam was arrested, some of his portfolio managers and analysts began looking for new jobs in an industry that only recently began hiring again after heavy losses in 2009.

Hedge funds on average climbed 3.0 percent last month, continuing a rebound that adds up to a 17 percent gain so far this year, according to Hedge Fund Research, but still have lagged the broader U.S. and Asian stock markets.

(Editing by Neil Chatterjee)