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AXA Investment Managers plans to launch its first capital guaranteed fund of funds product in the fall. The investment manager will sell capital guaranteed participation in a fund of funds to French retail investors and use the proceeds to purchase a basket of government and financial institution bonds, explained Daniel Léon, head of structured derivatives in Paris. It will then enter an asset swap in which it pays the counterparty the coupon on the bond portfolio and receives the performance of a fund of funds. The swap counterparty gains exposure to the fund of funds either through direct investments or by buying futures on a benchmark index and swallowing the tracking error.

AIG Financial Products has hired Jeffrey Robbins, ceo of derivatives boutique First Chicago Tokio Marine Financial Products in Tokyo, and a 15-year veteran of First Chicago/Bank One, as managing director, marketing in Tokyo. In this new position Robbins is responsible for marketing the firm's structured financial products. AIG FP likely will expand the operation with additional hires, Robbins noted, declining to elaborate.

Last week's decision by Japanese regulators to bar Goldman Sachs from the covered warrants market is unlikely to hurt the underlying market, according to traders. Goldman was barred from trading in the covered warrants market for two weeks and from issuing warrants for four weeks after misquoting pricing on a Japanese name, believed to be Sumitomo Mitsui Banking Corp.

A pair of interest-rate derivative traders has recently quit Kookmin Bank in Seoul to take positions at other firms. Both traders said there was no connection between the timing of their departures.

IntesaBci is structuring a synthetic collateralized debt obligation to free-up trading limits and achieve regulatory capital relief on a EUR805 million (USD688 million) reference portfolio of investment grade bonds and loans. Andrea Fabbri, director and deputy head of credit derivatives in Milan, said the transaction is aimed at cautious credit investors, such as insurance companies, mutual funds and banks. IntesaBci deliberately limited the U.S. component of the portfolio to 25% because credit quality is deteriorating faster in the U.S. than in Europe and it wanted a low risk structure. This contrasts with recent synthetic CDOs, Deutsche Bank's Repon 15 and BNP Paribas' Riviera Finance deals, in which over 50% of the portfolios are referenced to U.S. names.

Macquarie Investment Management, with AUS22 billion (USD11 billion) in assets under management, is preparing to launch a new hedge fund that likely will use over-the-counter derivatives, including interest-rate swaps, equity derivatives and credit default swaps. The asset manager hopes the launch the as-yet unnamed fund in the coming months and expects to use OTC derivatives for hedging and leverage, according to Phil Dolan, head of marketing and product development in Sydney. He declined to speculate on the fund's likely size or comment on its strategy.

New Zealand fund management firm Armstrong Jones Ltd. plans to solicit its trustees for approval to use over-the-counter equity derivatives on New Zealand stocks. Amanda Smith, senior investment manager in Auckland, declined to put a timeframe on the move, but said the firm is interested in using equity options for leverage.

Peter Sugarman and Troy Bowker, senior members of Rabobank's structured finance team, have joined Lehman Brothers in London. Sugarman joined as managing director and European head of financial engineering and Troy Bowker joined as a director in the same group, according to a spokeswoman. Both report to Amany Attia, head of structured finance in London. The recruits started Monday. Attia, Sugarman and Bowker did not return calls. An official at Rabobank declined comment.

Sustaining momentum is China's challenge as the global slowdown looks likely to impact on its economic growth. By Pauline Loong.

Sustaining momentum is China's challenge as the global slowdown looks likely to impact on its economic growth. By Pauline Loong.

The heads of the big four banks in China tell Pauline Loong how they are planning to meet increased competition from global players after WTO accession.

The heads of the big four banks in China tell Pauline Loong how they are planning to meet increased competition from global players after WTO accession.