Private equity specialist Carlyle is moving into the hedge fund business on the back of "client demand and product diversification", according to a source familiar with the firm.

Given that it bought Advantage Home Loans as long ago as December 2005, Morgan Stanley has taken its time to launch its first non-conforming RMBS transaction, ResLoc UK 2007-1. But the deal is not an Advantage deal; just 9.87% of the loans in the deal are actually originated by the lender. Morgan Stanley has been busy buying whole loan portfolios from other non-conforming lenders to ramp up this deal and the lion’s share of the collateral is actually originated by GMAC-RFC (79.9%). This will certainly offer investors comfort, given GMAC’s longevity in the sector. However, given the intense scrutiny that sub-prime lending has been under of late, the low, 6.1-month seasoning of the portfolio together with its 82.6% loan-to-value ratio might give some pause for thought. The US bank hired mortgage market veteran Rob Collins from Abbey last year to front its residential mortgage securitization business.

The International Securities Exchange, which pioneered electronic equity option trading in the US, has listed contracts on four currency pairs: US dollar/euro, US dollar/sterling, US dollar/yen and US dollar/Canadian dollar. Timber Hill will serve as the primary market maker, and Citigroup Derivatives Markets, Lehman Brothers and Optiver US will act as competitive market makers. The contracts are very much aimed at the US retail sector.

Dominion Bond Rating Service is now an eligible External Credit Assessment Institution with 11 EU countries. It is part of a long drive by the Canadian-headquartered rating agency to break into the industry oligopoly.

Political horse-trading in Serbia continues following the late January elections. However, despite the lack of a new government the country remains a strong magnet for foreign direct investment. In recent weeks, Serbia has concluded the politically sensitive sale of a leading mining company and the Belgrade Stock Exchange remains one of the best-performing bourses in the region. Romania’s Cuprom has secured the ownership of RTB Bor, Serbia’s largest copper mine, paying €303 million for a company the World Bank had suggested be closed down. Additionally, Cuprom has agreed to invest a further €137 million, alongside a €120 million commitment from the Serbian authorities to upgrade and provide equipment for the facility. Despite opposition from nationalist politicians and RTB Bor’s own management, the sale was pushed through by the outgoing government in the hope that it would boost economic prospects in Bor, one of Serbia’s poorest towns. Cuprom managing director Horia Simu says that the government had achieved the best possible price for the mine at a time of high copper prices. Copper prices have risen 44% in the past three months alone.

"It was one of those deals that really worked. It caught the market, it caught the moment and it caught the imagination" -Tim Skeet, Merrill Lynch

The Eurasian Development Bank, a new policy lender established in January 2006 by the governments of Kazakhstan and Russia, says its loan portfolio is set to hit $1 billion by the end of 2007 and $10 billion by 2012, from $216 million at the start of April this year. Igor Finogenov, chairman of the joint Russo-Kazakh policy lender, said in an interview with Euromoney that the first tranche of investments would be made in the two founding member countries, before being expanded to the rest of the Eurasian Economic Community, or EurAsEc, which comprises Russia, Kazakhstan, Belarus, Kyrgyzstan, Uzbekistan and Tajikistan. Three further countries hold the status of member-observer – Armenia, Moldova and Ukraine.

Small and mid-sized companies have outperformed larger ones for the past six years and their winning streak has so far continued into this year. While the S&P 500 has risen 2.2% year to date, the S&P 400 mid-cap index has shot up 7.7% and the small-cap S&P 600 by 4.7%.

FXMarketSpace, the 50/50 joint venture owned by the Chicago Mercantile Exchange and Reuters, officially went live as planned at the end of the first quarter.

The US government has in recent weeks intensified its pressure on the international community to enforce sanctions against Iran in response to its continuing programme of uranium enrichment. It seems, however, that Venezuelan president Hugo Chávez will be among those world leaders who ignore the proposed boycott. "The only country that has developed atomic bombs and dropped them on entire peoples is the North American empire... they don’t have the morality to be giving anybody lessons," he said on his television programme Hello President.

International banks continue to flock to Turkey, where the lure of a 70 million-plus population that is becoming increasingly bankable presents an almost irresistible attraction. Among the latest entrants to the Turkish banking market is Bank TuranAlem, Kazakhstan’s number two bank by assets. After nine months of negotiations it has secured a 33.98% stake in Sekerbank for TL424.7 million ($256 million). The acquisition was conducted by BTA’s investment banking arm, TuranAlem Securities, whose chief executive, Kairat Bektanov, says that the Sekerbank transaction is part of an expansion strategy that has transformed BTA from a purely Kazakh operation into a major regional player. The bank already has subsidiaries in Armenia, Belarus, Georgia, Kyrgyzstan, Russia and Ukraine as well as representative offices in China, Tajikistan and the United Arab Emirates.

FIAB and IADB aim to launch market for shares this year.

Rapid growth of Caja Madrid’s mortgage book last year prompted the Spanish savings bank to issue its first RMBS transaction. But as executive managing director and head of capital markets Carlos Stilianopoulos explains, the bank has its sights firmly set on the CLO market in 2007. Louise Bowman reports.

In the second half of last year, outstanding volumes of credit default swaps grew by 33%. This compares with the first half of the year, when outstanding CDS volumes grew by 52%. In 2005, CDS volumes rose by 105%. The numbers were produced by the International Swaps and Derivatives Association, which announced on April 18 the results of its year-end 2006 market survey of privately negotiated derivatives.

With Hoteloc still ringing in the market’s ears, Deutsche Bank’s conduit trips up on its pub valuations.

Doubts have surfaced about the feasibility of monetary union after a tense meeting of central bankers.

General Atlantic, a global private equity firm, has taken a stake in the Global Electronic Trading Company. Bill Ford, GA’s chief executive, and Rene Kern, its managing director, will join Getco’s board. GA has been steadily investing in the financial services sector. It has taken stakes in what it describes as innovative, technology-driven companies, including Saxo Bank.

The opening up of the Chinese FX market has continued with the unveiling of a new trading platform by the China Foreign Exchange Trade System. The platform, which uses Reuters’ electronic trading technology, initially went live on March 12 for currencies other than the yuan before being expanded to allow CFETS member banks to trade the yuan against five other currencies in early April.

Niall Cameron, who left ABN Amro as head of traded markets in February this year, has joined the Markit Group.

Czech power provider CEZ has been voted central and Eastern Europe’s best-managed company for the second year running. Rising energy prices are helping the firm to record strong profits, but why are analysts so impressed by the firm’s management? Lawrence White reports.

Oman’s landmark Blue City project has been dragged into a legal dispute after one of the project’s financial advisers was sued last month.

Euromoney has incorporated its annual credit research poll into a new fixed income research survey. The intention has been to give those banks that no longer follow the traditional fundamental sell-side credit research model a chance to be nominated by their clients.

Guaranty Trust Bank (GTB) came to the market in January with a $350 million Eurobond and became the first domestic borrower from Nigeria to access the international markets. Since then, two other banks, First Bank of Nigeria (FBN) and First City Monument Bank (FCMB), have also completed international deals.

Eighteen months after buying HVB, Italy’s UniCredit is close to finalizing its disparate emerging European businesses’ integration under the parent’s banner. But what is the next step for the bank and its head of the region, Erich Hampel?

Securitization used to be a dirty word in Brazil, with many investors intimidated by the risks of such a complex product and suspicious of promised double-digit returns in the local real currency. But since the creation of the fundos de investimento em direitos creditorios (credit receivables funds), FIDCs have become the vehicle of choice for non real-estate securitizations in Brazil, and foreign investors are flocking en masse to the market.

Fast-growing Russian Agricultural Bank plays a key role in promoting economic development in the Russian countryside. Guy Norton talks to Yuri Trushin, the bank’s chairman, about the challenges it faces.

Opportunities to invest in deep-value companies in Asia are plentiful but local knowledge is required to assess risk versus reward properly, Harmony Capital’s Suresh Withana tells Helen Avery.

Is Poland the new Russia? Not in economic superpower terms, but in riding roughshod over the wishes of foreign investors?

Following the departure of Sebastian Chatel to Credit Suisse, UBS has named Evandro Pereira as its new head of Latin American equity capital markets. Managing director Pereira previously ran capital markets in Brazil at UBS Pactual. He will now report to Tom Fox and Matthew Koder, co-heads of global ECM.

Unsolicited approach looks as if it could get nasty.