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The blow-up of corporate trades in China might lead to regulatory restraints on transparent, run-of-the-mill derivatives use.

US leaders might ponder the lessons of Venezuela and Iran.

Despite a new round of fundraising for distressed ABS, a market floor is not necessarily in sight.

Commodities: Investors plough a new furrow in agri-finance

Published in conjuction with: ABN AMRO; Banco Urquijo; Bank Gutmann; Barclays Wealth; BBVA; Marfi n Popular Bank; Sal. Oppenheim; SEB; SG Private Banking; TechRules; The Standard Chartered Private Bank

India remains an attractive investment opportunity for private equity funds despite a weakened economic outlook for the country and inflation at a 13-year high. Caroline Williams, a private equity partner at law firm Walkers in the Cayman Islands, says India is seeing increased interest from offshore money that is to be put to work in the national infrastructure programme over the next five to seven years. India is beating China in attracting private equity funds says Walkers. Private equity investment has risen consistently from $2.03 billion in 2005 to $17.14 billion in 2007. And the deals are getting bigger. In 2007, 48 deals of more than $100 million were closed compared with 11 in 2006, according to the firm. A further estimated $500 billion is needed in the next five years to meet infrastructure development plans for India.

Asia-focused hedge funds received $530 million in new assets over the second quarter, down from $1 billion in net inflows the previous quarter, according to HFRI. Its Asia hedge fund index has lost almost 14% this year. Recent research by Singapore fund of hedge funds GFIA suggests that performance is better among indigenous managers, and that London and New York will continue to lose market share to Asia strategies.

A study by quant fund AQR says hedge fund replicators are not necessarily what investors want. The new indices launched by banks such as Goldman Sachs, Credit Suisse and Merrill Lynch are too highly correlated to other asset classes within an investor’s portfolio to add much value, says the study. Furthermore, their inability to capture tactical shifts in hedge fund exposures because of lack of public information means that replications might not keep up with hedge fund moves.

But exchange still looks like a political tool.

US long/short fund Andor Capital, spun out of Pequot Capital in 2001, is closing its doors and returning money to investors. The fund manages more than $2 billion in assets. Co-founder David Benton said in a letter to investors that he wanted to devote more time to his family and other interests.

Senior bankers in China remain confident that the economy will continue to provide a favourable backdrop for the banking industry, despite a slowdown in growth. However, some concede that a more complex economic environment in China and abroad will bring greater challenges to the banking system, especially in risk management.

IPOs are scarce enough as it is in this gruesome global market. But the largest ever IPO from one of the world’s poorest countries, whose previous record deal was in 1994? That’s rarer still.