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Lending volumes are down as syndicated loans continue to suffer from the liquidity crisis with cash from institutional investors having dried up. But as Nat Mankelow reveals, new capital from uncorrelated sources could provide a solution.

— Prof David Blake, Cass Business School

With longevity making up an increasing proportion of pension scheme risks, new and innovative capital market solutions are being developed to transfer these out, reports Martin Steward.

— Bernd Volk, Deutsche Bank

The UK’s new framework for covered bonds should provide a boost to the market in the long term, although the timing of the launch has been unfortunate, writes Christine Senior.

— Robert Howie, Mercer

The exorbitant fees charged by some funds of hedge funds are leading to calls for different fee structures and even direct investing. But the funds themselves argue that what they offer is even more important given the market volatility. Ceri Jones reports.

— Kerrin Rosenberg, Cardano UK

A new toolkit from the NAPF – including a detailed annual survey of user satisfaction – is meant to bring the assessment of investment consultants out into the open. But are they the right tools? Martin Steward reports.

— Dr Schweickhardt, Hardt Group

Institutional investors have just started disaggregating alternatives into strategy-specific allocations and separating alpha and beta exposures. Hardt Group’s founders were talking up these trends two decades ago, and in 2004 they modelled their alternative investment

platform to enable investors to build portfolios on these principles. Martin Steward reports.

— Rob Arnott, Rafi

A second generation of ETFs claims to offer an advantage over traditional market-cap weighted equity indices. Ceri Jones reports.

— Richard Warne, Morley

The second half of 2007 was poor for enhanced indexing funds. However, ‘truly scientific’ managers with new investment ideas could reverse this trend, while clients disappointed with paying active management fees may begin to switch. Ceri Jones reports.

— Jens Bisgaard-Frantzen, Private Advisors UK

Virginia-based private equity and fund of hedge funds firm Private Advisors has established its first presence in Europe. Martin Steward speaks with CEO Jens Bisgaard-Frantzen about the strategies the firm brings to Europe and his plans to broaden the investment offering.

— Caroline Philips, Eurohypo

The global credit crisis has seen issuance of commercial mortgage backed securities drop significantly. But investment banks tell Nat Mankelow that instruments are currently mis-priced, preventing investors from behaving rationally.

— Georg Feldscher, Raiffeisen International

Securitisation is showing signs of life in Central and Eastern Europe, with Austria as the hub. Nat Mankelow reports on the private deals being struck, but asks, when will the public market return?

— Hassan Houari, Barclays Capital

Bespoke products for investors and variance swaps are just two examples of the innovation seen in the equity derivatives market in recent years. Christine Senior reports.

Attracted by less regulation and greater investment flexibility, Chinese firms are seeing a migration of key personnel from public to privately managed funds. Henry Smith investigates.

— Jesper Bang, Dresdner Kleinwort

With investors worried by the events of the past year, hedge funds are seeking tighter regulations over prime brokers’ access to their assets. Elizabeth Cripps reports.

— Karina Litvack, F&C

Climate change and social responsibility dominate the political agenda, but are the big institutional investors taking any notice? Elizabeth Cripps reports.

— Johanna Kyrklund, Schroders

Fund managers are using ETFs to access emerging markets and maintain exposure to broad markets. Ceri Jones reports.

— Tian Rencan, CEO, Fortis Haitong

Volatile market conditions, increasing competition and a slowdown in growth are all likely to have an impact on funds launched under China’s Qualified Domestic Institutional Investor scheme. Henry Smith assesses the prospects for new products set to roll out in 2008.

— Kazuo Katayama, Japan’s MoF

Japan, keen to boost foreign interest in the yen-denominated bond market, is undertaking an exhaustive ‘world tour’ of roadshows. Nat Mankelow assesses the task in hand, and the government’s chances of success.

— Mike Ward, Merrill Lynch

The search for alpha is driving institutional investment managers to demand increasingly sophisticated and tailor-made equity derivatives, reports Elizabeth Cripps.

— Daniel Draper, Lyxor

Complex tax regimes and different platforms make it difficult for Europe to catch up with the US. Growing triparty services could help.

— Thomas Huertas, FSA

The European asset-backed securites market is in for a long, cold winter. Nat Mankelow examines the likelihood of recovery come spring.

Delegates to this month’s euro fixed income forum in Paris discuss how the ongoing fallout from the credit crisis has presented a number of opportunities for institutional investors, in addition to expanding the role of central banks. Nat Mankelow reports from the French capital.

— Timothy Lyons, PensionsFirst

PensionsFirst has come to market with schemes promising “complete immunisation of all risks” – including longevity risk – and with a suite of tailored products that will securitise those risks for the capital markets. Is it all too good to be true? Martin Steward investigates.

Nat Mankelow talks to Dr Fritz Janda, managing director of Fachverband der Pensionskassen, the driving force behind Austria’s second pillar pension revolution.

— David Lincoln, Element Venture Partners

Why do European investors lag so far behind US investors in allocating to cleantech venture capital? And as cleantech moves up the cap-scale, will this further discourage much-needed early-stage financing? Martin Steward reports.

— Courtland Washburn, Hancock Timber Resource Group

Logging your first timberland investment is not about going out on a limb: it could provide compelling returns with low volatility, while allowing you to plant – literally – an effective inflation hedge. Isn’t it time you saw the wood through the trees? Martin Steward reports.

BidRoute has been dubbed the eBay of portfolio trading, and the startup hopes to bring standardisation and transparency to the portfolio trading marketplace. Peter Guest reports.

— Eric Obersteiner, Raiffeisen Bank

Emerging Europe is providing plenty of opportunities for investors with an ever increasing number of initial public offerings. Nat Mankelow reports.

Nat Mankelow talks to Dr Fritz Janda, managing director of Fachverband der Pensionskassen, the driving force behind Austria’s second pillar revolution.

— says John Gripton, Capital Dynamics

Both funds of hedge funds and private equity funds of funds are proving increasingly popular, although fees can be a performance drag. Gerry O’Kane reports

— Matt Moran,CBOE

Because volatility trading is inversely correlated with equity movements it can deliver enormous diversification benefits. Ceri Jones reports.

— Andrew Lo, MIT

A new paper by MIT academics attempts to unravel the reasons for the dramatic and unexpected fall in quantitative funds in August. Peter Guest investigates.

— Morgan Downey, LaSalle

The subprime tidal wave is sweeping through hedge funds. Is the leveraged CDO trade dead? Is this a buying opportunity in ravaged fixed income markets – even for asset-backed securities? Martin Steward looks for the upside within the current crisis.

— Ian Cash, distressed specialist, Alchemy Partners

LBOs were among the first to come under scrutiny after the credit crunch. How serious will the fallout be for private equity – and can distressed provide the upside? Martin Steward reports.

— Toby Nangle, Barings Asset Management

Distress in the US subprime housing market has resulted in an ongoing credit fallout which is affecting banks around the world. Nat Mankelow takes a look at the issues involved.

— Rick Lacaille, SSGA

Once the preserve of sophisticated investors, the versatility of equity derivatives has catapulted them into the mainstream. Matthew Craig outlines the various ways in which they can be used.

— Sara Ståhl, business development manager, European Climate Exchange

Global carbon trading has more than tripled over the last year and financial institutions are set to get in on the act going forward. Ceri Jones looks at the current and future market trends.

— Mark Azzopardi, BNP Paribas

The growth of insurance-linked securitisation has been steady in the past decade, particularly since Hurricane Katrina. That looks set to continue, as Nat Mankelow reports.

— Daniel McAlister, Ermitage Asset Management

Speakers at June’s WBR Commodity Investment Summit suggested that institutional investors are sold on the diversification benefits of commodities, but managers warned of the peculiarities of commodity beta and stressed that alpha should be mixed in. Martin Steward reports.

— Peter Marber, HSBC’s Halbis

Slim pickings in the fixed income space have forced investors to work harder for returns. Nat Mankelow reports on how institutions are seeking nimbler and smarter strategies.

— Mark Dwyer, Mellon Transition Management Services

The issues facing transition managers are not new, just more complex, and provided they can decipher these intricacies for potential clients, business can grow, writes Gerry O’Kane.

— Jonathan Stubbs, Citi

Faced with the challenges of structural changes in globalising markets, how does quantitative management respond dynamically? Quants professionals and academics discussed the topic at the annual Citi Investment Research Quantitative Conference. Martin Steward reports.

— Bob McDowall, Tower Group

Interest in FX trading has rocketed this year as its attractions as a diversifying asset class with exciting potential returns are increasingly appreciated, writes Ceri Jones.

— Susanne Willumsen, State Street

Complex collateral arrangements, IT reconfiguration and the potential for unlimited losses are just a few of the challenges purveyors of 130/30 funds will face, writes Christine Senior.

So-called ETCs are opening up access to a headline-making asset class. What are their advantages? And how might they change commodity markets? Martin Steward reports.

— Sebastien Buczek,ING Investment Funds

Poland is still attractive to western investors, with turmoil in the country’s largest bank opening opportunities, but shake-ups in Ukraine make it an exciting prospect, writes Yuri Bender.

— Jerome Booth, Ashmore

Two leading managers in long-short equity and emerging-market debt see a wealth of opportunity in Eastern Europe – but a passive ‘convergence’ play doesn’t cut it, writes Martin Steward.

— Dan Draper, Lyxor

As Lyxor moves into the UK ETF market, it advises investors to watch out for expensive fees. However, they can be offset by securities lending, writes Henry Smith.

— Jean-Baptiste Gaudemet, Sophis

An ever-increasing sophistication in the equity derivatives market has made them more appealing to hedge funds seeking greater liquidity in their investments, writes Martin Steward.

Sophisticated products in Asia have led to calls for investor training, but perhaps the tendency to churn investment funds in the region is not as ignorant as it may seem. Henry Smith reports.

— Ted Lord, Barclays Capital

As demand for covered bonds reaches new heights in Europe and North America, the previous big players now seem to be in decline. Nat Mankelow reports.

— Bilal Hafeez, Deutsche Bank

FX is trying to enter the mainstream, with many suggesting a one fifth allocation to the asset class. But should investors merely be pursuing a more aggressive fund? Nat Mankelow reports.

— Ian Lloyd, Rabobank

Until recently, there was no standard definition of an enhanced cash fund, which generally vary in credit quality and volatility, but now they are falling into line. Christine Senior reports.

— Alan Brown, Schroders

Pension funds’ obsession with going short to haul themselves out of a deficit is harming the long-term prospects and blinding them to solutions in the long-term. Nat Mankelow reports.

— Frédéric Ducoulombier, Edhec

Property derivatives offer investment in real estate without all the usual hassles, add diversification, cut costs and are very flexible. However, education is key, writes Elizabeth Cripps.

— Tushar Patel, HFIM

Older hedge funds may provide capital preservation, but the start-ups – featuring experienced managers and a solid infrastructure – are posting good returns. Martin Steward reports.

— David Currie, Standard Life Investments

Private equity standard fees once seemed set in stone, but now as the size of transactions increases, there may be some movement over the amount charged. Martin Steward reports.

— Chris Ruffle, Martin Currie Investment Management

Foreign and local joint ventures in China often go awry due to a mis-match in ambitions. However, many players are confident of growth going forward. Henry Smith reports.

— Robert Lawrence Kuhn, Citigroup

There will be a cautious atmosphere in the securities business in China this year, as the industry waits with bated breath on the outcome of a Communist Party congress, writes Henry Smith.

— Emmanuel Fages, SGCIB

Companies have begun tackling lowering their carbon emissions, but responsibility for their ‘footprint’ is now passing to the investment managers who own the firms. Paul Garrido reports.

— Nik Bienkowski,ETF Securities

A stellar year for ETFs has seen a rush from institutions to seize a piece of the pie, and more sophisticated products on the horizon could provide further success, writes Gerry O’Kane.

— Brendan Bradley,Eurex

A trend for asset managers to become more active and a blurring of the differences between them and hedge funds has seen a convergence toward equity derivatives. Gerry O’Kane reports.

— Marcus Schüler,Deutsche Bank

Interest from institutions in credit default swaps has seen a knock on effect from brokers and providers, and the industry is seeing massive growth. Nat Mankelow reports.

— Arthur Rakowski, Macquarie Bank

The equity market fall is a timely reminder of how important it is to diversify your portfolio. Paula Garrido reports on asset classes away from stocks and bonds.

Institutional investor interest in alternative asset classes has been on the rise over the last decade. Alternative assets offer investors new routes to finding extra returns by investing in markets and strategies not easily accessible via traditional investment management. One of alternative assets’ selling points has been their low correlation with market performance.

— Heinz: classification is an enormous issue

Diverse portfolios and a lack of historical performance makes measuring hedge funds difficult. But consistent monitoring of new sub-strategies is making life easier. Ceri Jones reports.

— Sampson: hedge funds questioned more

Hedge funds are slowly becoming more transparent to cater for institutional demand. However, there is always the chance of exposing portfolios to the competition. Ceri Jones reports.

Chinese A-shares may well have experienced a disturbing recent drop, but most expect solid performance going forward, albeit with an extra element of volatility. Henry Smith reports.

— Courtenay: euro market should grow faster

Risk hungry institutional investors are flocking to the high yield bond market, but this has resulted in lower returns due to capacity issues in Europe. Nat Mankelow reports.

— Dwayne: we think UK oil firms are dull

Europe is still considered an exciting place to invest for fund managers, though they are slightly less positive on the UK. Are they also missing out on eastern opportunities? Paula Garrido reports.

— Page: PRI is meant to be a potential goal

It seems that the business world is taking action on environmental, social and governance issues quicker than governments, as it affects their bottom lines, writes William H. Page.

— Tom Lamb,Barclays Private Equity

While the European private equity market appears to be following in the footsteps of the US with some very big deals, there remains a certain amount of cynicism in the UK, writes Gerry O’Kane.

More and more institutional investors are deploying liability-driven investment strategies which involve the use of swaps to mitigate risk. Here, Moorad Choudhry explains the factors which influence swap spreads.

— Moody: sponsors must understand risks

WH Smith was a pioneer of LDI in its attempts to save its final salary scheme. However, despite the fund’s forthcoming closure, the firm insists LDI was successful. Simon Hildrey reports.

— Ebers: compliance remains key

As hedge funds make up more than half of the trading volume on major exchanges, prime brokers are getting in on the action. But what attributes must they possess? Elizabeth Cripps reports.

— Prestbo: banks launching synthetic products

With synthetic hedge funds offering hedge fund-like returns without the high fees, it’s no surprise that investment banks are looking to capitalise on new institutional enthusiasm. Elizabeth Cripps investigates.

— Ubbe Strihagen,Aberdeen

With yet another record property sale, investors are clamouring for real estate exposure. And market commentators are not expecting a pull back in prices any time soon. Paul Garrido reports.

Thematic investing involves identifying certain social, economic, industrial, and demographic trends, or “themes,” that may ultimately drive the positive performance of a portfolio of securities benefiting from these trends.

— Shaun Wainstein,BNP Paribas

As the popularity of equity derivatives has risen, so too has the range of products. Tim Cooper reports on their use within hedge funds, swaps and futures, as well as tailored solutions.

— Aitken: benchmarks are changing

Christine Senior reviews the latest mandate trends and assesses the growing importance of liability-driven investment on both sides of the Atlantic.

Portfolios are becoming more structured and complex. Investments are made across various equity styles, various fixed-income instruments, numerous alternative investments and alpha sources.

Wojtek Nabialek reveals various approaches to generating alpha, and how to understand its dynamic behaviour.

— Ellis: good risk-adjusted returns are forecast

Property’s current stellar returns are no secret, but with such good performance managers are looking at expanding their portfolios abroad and into alternatives, writes Christine Senior.

The expected rush towards inflation-linked bonds in the Netherlands following FTK has not happened, but Dutch managers are beginning to realise their value, writes Gerry O’Kane.

Wojtek Nabialek unveils a long-term approach to investing in commodities, which have received a new lease of life among institutions

— Graham Martin, Optima Fund Management

The line between traditional and alternative investments is blurring, as large houses emulate the flexibility of boutiques and regulation controls the smaller players. Paula Garrido reports.

— Daan Potjer,ABN Amro

Although GTAA first emerged in the 1990s, at a time when the investment climate was wrong and knowledge was patchy, the time now seems right for the strategy, writes Gerry O’Kane.

Wojtek Nabialek assesses how structured products can optimise the asset and liability management of pension funds.

— Sunil Chadda, Citisoft