The investor revolt in the leveraged loan market during June and July was long overdue and much needed. But have the excesses of the past few years left the LBO market teetering on the precipice of a far more serious credit squeeze? Louise Bowman reports.

Satish Selvanathan has left Barclays Capital, where he worked for two years under the leadership of ABS veteran Rob Ford. However, Ford left Barcap just before June to become a partner at Synapse – a credit hedge fund.

UniCredit continues to expand its operations in central and eastern Europe, with the acquisitive Italian banking group turning its gaze towards Ukraine in July. Bank Austria Creditanstalt (BA-CA), which is responsible for UniCredit’s commercial banking activities in central and eastern Europe, has signed an agreement to buy 95% of Ukrsotsbank (USB), Ukraine’s fourth-largest bank by assets. The deal follows June’s $1.5 billion purchase of a controlling stake in Kazakhstan’s ATF Bank and the acquisition of the European Bank for Reconstruction and Development’s 10% stake in Russia’s International Moscow Bank for $229 million.

Asset manager New Star has seen significant growth in its alternatives business. In the second half of 2006, the firm raised more than $550 million for two hedge funds. In May this year, it launched a European opportunities hedge fund, which has now about $100 million in assets under management. In the last quarter of this year, New Star will be launching a property hedge fund. Robin White, of Rock Capital, is joining to head the fund.

Downgrading tranches and revising criteria will not convince the market that the rating agencies are on top of the sub-prime mortgage crisis.

Japan’s equity bounce-back has lost momentum. But there are good grounds for believing that a floor has been reached and that renewed buoyancy is around the corner.

What exactly is causing weakness in the credit markets? The obvious answer is contagion from the sub-prime crisis – the fear is that there will be massive losses from the original securitizations of these poor-quality loans and the CDOs backed by these securitizations.

Investors will still want access to the best-run funds.

Emerging market debt has held up well in the face of a nascent credit crunch in developed markets.

A new Euromoney poll asked leading institutions that invest in alternatives to nominate their dream hedge fund managers across a number of styles and asset classes. One thing is clear – even as the number of hedge funds continues to soar, reputation and track record count most. Helen Avery reports.

Quinenco, the largest shareholder in Banco de Chile, and Citi have agreed a partnership in which Citi will have the rights to acquire up to 50% of the holding company that controls Banco de Chile.

Like most Philippine banks, Banco De Oro has enjoyed a re-rating as the fortunes of the local market have improved. With the shares now at a price to book ratio of about 2.8 and on a prospective P/E ratio of 18, even CEO Nestor Tan thinks the bank, like the stock market, is fully valued for now.

Goldman Sachs has appointed Chris Barter and David Schwimmer as joint CEOs of its Moscow office. Barter was previously co-head of the European financial institutions group in London at the bank. He will relocate to Moscow by the end of the summer. Schwimmer was head of investment banking for Russia and central and eastern Europe. He is already based in Moscow. Goldman received its first Russian securities brokerage licence last year and, according to observers, is hiring aggressively across all products

After many years during which change was merely incremental, electronic trading in debt markets is about to be fundamentally transformed. New entrants and platforms have emerged or are mooted, and fresh partnerships are being considered as incumbents find their value proposition under pressure. Dealers and clients will face a completely new way of debt trading. By Alex Chambers.

Dresdner Kleinwort has become a victim of its own success in central and eastern Europe, says a source at the bank explaining why the firm has been hit by a series of departures in recent months.

Investment house issuance on private electronic markets relieves them of regulatory burdens and speeds up funding. But poor liquidity remains a problem.

It is not uncommon in any market for an underlying to gravitate towards certain option strikes as they near maturity. In foreign exchange, which is arguably the most sophisticated options market, it is increasingly the barrier component of exotic trades that acts as the magnet. The amount of leverage certain structures can provide results in huge buying and selling of the underlying as participants try to defend or knock out the barrier.

HSBC has beefed up its DCM operation, making a number of hires – especially from Nomura.