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Portugal’s Espírito Santo Financial Group (ESFG) and Banco Espírito Santo Group (BES Group) has taken a 5% stake in Saxo Bank. It also has an option to expand this to 10% within five months, which would make it the third-largest shareholder behind Saxo’s two founders and joint chief executives, Kim Fournais and Lars Seier Christensen, and General Atlantic, the US private equity fund. The deal is believed to value Saxo at about €1.26 billion ($1.8 billion).

Saxo flies high...

Icap appears to be making hay while the metaphorical sun shines.

Gain Capital Group has announced the completion of an investment round totalling $117 million from two leading private equity firms specializing in finance and technology.

Among the doom and gloom, it’s nice to be able to report a hire rather than a fire. Voltrex, an FSA regulated broker, has hired Alan Moore as a consultant for its online foreign exchange platform. Moore was previously with State Street Bank, where he was responsible for its London FX business; he was managing director of Global Link and FX Connect, the bank’s multibank e-commerce portal. Moore will report to Graham Farrow, Voltrex’s managing director.

At least Voltrex hires...

Even though Bank of America’s FX operation is supposedly a core business the bank took an axe to it this week, prompting a former employee to quip: “I guess it’s back to Charlotte to sell credit cards.”

Credit Suisse is relocating its spot desk in London to Zurich. The decision is said to affect fewer than 10 traders, who might or might not make the move. “In order to maximize efficiencies and streamline our foreign exchange trading business, we are combining our London and Zurich spot trading desks. A single European spot trading desk will allow us to deliver better service to our clients and maintain a leading position in the FX market,” the bank says.

My old mate Roland White, head of the FX bank sales team at Citi in London, has apparently left the bank. No further details are available.

iShares reported that trading volumes on Tuesday and Wednesday were more than three times the normal trading volume across Europe, as investors took employed real-time trading, efficient pricing, and cost efficiency of ETFs.

Active managers could lose up to $12 billion a year in fees as index-based products gain popularity, research from the TABB Group reveals. In the U.S., about $1 trillion is invested in index-based products such as exchange-traded funds. Index-based assets under management have grown by 2,610% since 1993.

LaBranche & Co., the holding company of the beleaguered New York Stock Exchange specialist firm, is planning to use its cash to grow structured product businesses in the U.K. and Hong Kong. LaBranche ended up with a $269 million war chest at the end of the fourth quarter, up from $148 million in 2006, thanks to a 75% reduction in net capital requirements at the NYSE. The subsidiaries, which were registered two years ago, mainly make markets in ETFs and still make up a “very small” portion of overall revenues, much less than 50%, said Michael LaBranche, chairman, ceo and president on an analyst call Friday. He declined to be more specific about revenues, saying that the company doesn’t break them out in its financial analysis.