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Citigroup's latest acquisition

Traditional active equity asset managers are alienating their institutional clients through underperfomance and high fees. Many pension funds and insurance companies in the US, UK and Europe are embracing passive index tracking, while others are devoting more attention to the rewards - and the risks - of hedge fund investing. The search is on for performance, or alpha, wherever it may be found. The whole asset management business may soon be transformed. Peter Lee reports.

Privatization is still keeping lawyers busy the world over - and benefiting from the vital contribution they have to make. By Christopher Stoakes

To the casual visitor Prague seems a very civilized place. The city is bristling with church spires, historic buildings, museums and elegant squares. Every night is a cultural feast with opera, classical music and theatre of the highest quality. In this rarefied atmosphere, artistic and intellectual endeavours thrive and it is difficult to believe that the country was once under the dead-hand of communism.

Pedro Solbes, Commissioner for monetary and economic affairs, European Union

Citigroup's latest acquisition

Japan's new leviathans

They may be a decade late, but Japan's banks are finally restructuring. The headline deals will create the world's two largest banks. An exclusive interview with Masao Nishimura, president of IBJ and a prime mover in the recent combination of IBJ with Fuji Bank and DKB, gives an insight into the thinking of Japan's financial elite. But, as Simon Brady reports, bad debts, low profitability and economic malaise will prevent even these new giants from becoming world leaders.

Turkey is supposed to be privatizing; it's also ostensibly following policies that will bring down inflation. But vested interests that benefit from the unwieldy structure of state corporations and a banking industry dependent on earnings from high-interest treasury paper are thwarting these processes. The privatization of Turk Telekom is a tangled tale of delay and indecision, and a banking industry that can cope with a low-inflation environment is something to hope for rather than an immediately practicable reality. Metin Munir reports.

It has been a banner year for new issues of convertible bonds, with many forces working together, especially in Europe, to support the primary market. Low interest rates and hopes for equity market growth have prompted more and more investors to buy convertibles and the pressure on companies to enhance shareholder returns and to unwind cross-holdings has prompted the issuers. High stock market volatility, following last year's financial meltdown, has also helped the market. This is the full text version of a roundtable discussion, exclusive to Euromoney On-Line.

NatWest gambled on bancassurance, lost its acquisition target and its chief executive and triggered a raid on itself from Scotland. Many in the City of London are pointing the finger of blame at adviser JP Morgan for encouraging NatWest's delusions. How did an investment bank that prides itself on telling clients which deals not to do get so much egg on its face? Marcus Walker reports

From the mid-1990s enabling legislation and corporate issuance guaranteed a rapid take-off for Japan's securitization market. But economic recovery, recapitalization of the Japanese banks and their renewed enthusiasm for holding corporate assets may leave the market dependent on consumer finance and residential mortgage deals. This might not be enough to sustain the sector. Luciano Mondellini reports.