The borrower's perspective; LBO financing: a changing landscape; Prudent expansion is the key; LTM European Holco PIK's – the next stage of the bull market

Challenges of running prop and client money prove too much for Dillon Read Capital Management.

After a recent correction, Vietnam’s equity market has bounced back and so has capital-raising for new funds. The latest to tap the markets are PXP Vietnam Asset Management and Mekong Capital. Both managers have successful track records investing in Vietnamese equities yet both are raising new funds to expand into new investment areas.

Amid the fallout from the US sub-prime sector collapse, investors are once again questioning the role of the ratings agencies. It’s not just that the agencies assessed the risks so badly; their harshest critics suggest the main cause for concern is that the raters are too cosy with the issuers on which they pass judgment. Alex Chambers reports.

The jumbo covered bond market had another banner year in 2006. A record €170 billion of issuance was accompanied by significant globalization of the market. But the growing range of structures, from an ever-expanding group of countries, is a double-edged sword, adding complexity as well as diversification.

"We absolutely cannot talk about it," was the repeated response of Goldman Sachs to market reports that it is setting up a mini private exchange to enable alternative investment firms to list without the hassles of regulatory oversight.

Market mechanisms, not inflexible penal taxation, are the way to deal with global warming. And market approaches also open profitable channels for investors.

The smart money is already betting that the credit cycle is turning.

"Algorithmic trading can be shit sometimes"

"Ours is a top-down, bottoms-up strategy"

Neil Wilson, editorial director at HedgeFund Intelligence explains why the Big Apple still holds some aces.

Synapse Investment Management, which was founded in 2006 by Graeme Anderson and Mark Holman, has put itself firmly on the map with the recent hire of Rob Ford from Barclays Capital.

The hybrid sector’s focus might be turning to Asian retail but as Euromoney went to press Munich Re announced an interesting €1 billion benchmark hybrid transaction – rated A3 (Moody’s)/ A (S&P)/A+ (Fitch) – with Deutsche Bank, JPMorgan and UBS as bookrunners.

The Colombian government’s decision to impose further capital controls in order to hinder the peso’s rapid appreciation amounts to "bad policy-making", according to Walter Molano of BCP Securities. In a research note on May 25 Molano said: "Colombia is one of the few emerging market countries that is not taking advantage of the commodity boom. Instead of focusing on its vast natural resource base, Colombia is exploiting the special relationship it enjoys with the US to secure quotas and preferential tariffs for light manufacturers – particularly textiles and clothing." The new regulations extend yet further the compulsory deposit requirements for investors.

Venezuelan president Hugo Chávez has responded with scorn to criticisms that his refusal to renew the licence of opposition TV channel RCTV amounts to a direct assault on freedom of speech. The popular channel, which Chávez accuses of having supported an attempted coup in 2002, stopped broadcasting on May 27, leaving the country bereft of many of its favourite soap operas and comedy shows, and also of any mainstream anti-Chávez television. Chávez described as "laughable" the passing of condemnatory motions by both the Senate Foreign Relations Committee in Washington and the European Parliament. The president clearly fancies himself as something of a media mogul: Venezuela is to give Danny "Lethal Weapon" Glover $18 million for a film about the Haitian slave uprising.

UBS has hired loans syndication specialist Monica Macia from Citi to work as an executive director on the loans capital markets group. A spokesman for UBS said that the firm had no comment to make on speculation that the move suggests a change in emphasis for the bank.

180 – the percentage rise in the value of US real estate ECM deals in the year to date over the same period in 2006. The total raised so far this year is $19.5 billion, up from just $7 billion in the 2006 period. The proportion of money raised by real estate companies through convertibles has increased 20 times, and currently accounts for 58% of US real estate ECM volume, $11.3 billion, compared with just 8% in the same period in 2006.

Increasing international competition for China listings, most notably between London’s Alternative Investment Market (AIM) and China’s domestic markets of Shanghai and Shenzhen, is squeezing market leader Hong Kong, say insiders.

Dividend swaps market soars as investors profit.

Broker dealers collaborate to sponsor Project Alpha.

Unknown risks – the black swans – could upset the Asian party.

Investors are concerned that while low yields on Latin American sovereign debt and increasing opportunities in the corporate sector are driving more and more investors towards corporate fixed income, Wall Street credit research can’t keep up.

Brazil, which is already a major player in the $30 billion global trade in carbon credits, aims to hold its first online carbon credit auction this year on the São Paulo BM&F commodities and futures exchange in an initiative geared towards attracting European buyers. "We hope to reach an accord with one particular company interested in selling its credits via auction in the second half of the year," says Guilherme Magalhães Fagundes, the BM&F’s head of special projects. With a lack of liquidity in the world carbon credit market, daily trading is still some years away, but the BM&F says it aims to make the auction possible on the basis of buyer or seller demand and widen carbon credit sales away from the current business-to-business format.

Tapping into the growing trend for green investing, in May CLSA Capital Partners launched Asia’s first dedicated water and waste management fund, Clean Water Asia.

Credit Suisse and Instinet, the agency broker owned by Nomura Holdings, announced in May that they had agreed to link up their proprietary "dark liquidity pools" in Japan to enable their respective international clients to trade more efficiently in Japanese securities by executing larger trades with minimal market impact.

The chances of a single Gulf currency receded further in May after Kuwait decided to break away from its US dollar peg and fix against a currency basket instead. At the time of writing the make-up of the basket was not known.

UK venture capital firm Oxford Capital Partners and Qatar National Bank and its private banking subsidiary Ansbacher Group have teamed up to form Qatar Capital Partners (QCP), a venture capital business in the Gulf state.

Companies working on improving inadequate water supplies in Asia’s growing economies are the prime focus of Wessex’s water investment fund. Co-founder Tim Weir tells Helen Avery how the company analyses their likely profitability.

In late May, Fitch Ratings cautioned that the outlook for debt issuance from central and eastern Europe might not be quite as rosy as some bond originators would have us believe. Although acknowledging that macroeconomic fundamentals in the region are strong and that the global environment remains generally supportive, the London-based ratings agency warned that substantial external financing requirements in some states mean that they are relatively highly exposed to a potential abrupt tightening in global liquidity. "Sovereign credit ratings in emerging Europe have risen further over the past 12 months, with seven upgrades and no downgrades," says Ed Parker, head of Fitch’s emerging Europe sovereign group. "However, upward momentum may be running out of juice, with only three countries – Armenia, Kazakhstan and Ukraine – now on a positive outlook and two – Hungary and Latvia – on a negative outlook."

The International Swaps and Derivatives Association and a group of financial lawyers sponsored by the Federal Reserve (the Financial Markets Lawyers Group) have backed a Bear Stearns’ court appeal. In February this year, Bear Stearns was deemed liable for $125 million that fraudulent hedge fund the Manhattan Investment Fund, had deposited in the prime brokerage account it held at the investment bank before it filed for bankruptcy. The bankruptcy court concluded that Bear Stearns was liable for the deposits as their "initial transferee".