This quarter Nick Fitzpatrick assesses data that suggest custodians are selecting which of their clients receive the best and worst rates on FX transactions

Few industries can claim to have seen as much growth as hedge funds can. The development of the hedge fund industry has led to a greater reliance on prime brokerage capabilities, and in the FX world, this is no different. Alternatives brings together people from both sides of the business to look at developments in FX, and to ask what impact FX has on hedge funds.

Foreign exchange trading volumes increased in 2005 thanks to a considerable boost from fund managers, pension funds and non-traditional FX traders like the so-called "aggregators" that facilitate retail trading, but the market could not maintain the 25% growth rate set in 2004.

Investment managers still have scaleability issues in their performance departments. This is despite increasing investment in new systems over the past few years, according to a new Performance & Risk Survey conducted by Investit, the investment management consultancy.

A CULTURE OF TRANSPARENCY What information do fund managers need to disclose to their clients about how their portfolios are managed? CFA's John Barrass reports on an issue troubling regulators.

This article appears courtesy of Global Investor.

In 2004, the Société Générale Group created a new division, Global Investment Management and Services (GIMS) to seek out synergies between asset management, private banking and securities services. Shahnaz Mahmud explores how successful the French bank has been at identifying these connections and the impact on SGAM.

Hedge funds are squaring up to the fact that the next phase of their development will be more difficult, due to capacity shortages and low returns. In the second in a new series of articles based on the latest global research study carried out jointly by Create and KPMG, Prof Amin Rajan and Tom Brown examine the prospects for the hedge fund sector.

Faced with the declining profitability of traditional fixed income, asset managers have sought to beef up their credit teams to enable them to compete in the higher margin world of credit derivatives. But just how well do asset managers know these instruments, and are pension funds aware of the risks? Claire Milhench talks to some of the leading participants in the market and assesses the benefits and dangers of using these complex instruments.

Infrastructure equity has been big in Australia and Canada for a while, admired for its low risk, long-duration appeal. However, the sector's early success has led to a flood of new entrants, who are already driving down returns – and more are on the way. Is the market over-sold before it has properly begun? Claire Milhench reports.