The Upshot: Lloyds in derivatives play

Lloyds TSB is hiring junior derivatives traders and structurers. But is it too little, too late?

The UK bank, best known for its retail banking rather than capital markets activities, is on the look out for derivatives structurers and traders with up to three years' experience and a degree in a quantitative discipline.

Recruiters say the junior build-out follows a number of senior hires over the past six months, including Mark Preston, former head of CIBC Europe, who was brought in to expand the bank's financial markets business.

One derivatives headhunter cast doubts on Lloyds' ability to attract talent in the competitive derivatives market, however: "They are obviously trying to build something, but they are never going to make big waves in this market."

Morgan Stanley shows some muscle

With a new US acquisition, Morgan Stanley has signaled that pumping up its asset management arm is a priority.

Morgan Stanley Investment Management has bought Boston-based hedge fund Oxhead Capital Management, which oversees around $100m of assets, reports Financial News.

Stu Bohart, head of Morgan Stanley's alternative investment business, says, "We are planning for more internal hires, team lift-outs, and bolt-on acquisitions."

The bank said it has hired Oxhead's investment team and acquired substantially all the assets of the investment management company.

Barclays Capital embarks on African expansion

Dreaming of a financial services career overseas but don't fancy Asia, the US or Europe? Why not try Africa.

Investment bank Barclays Capital is developing the investment banking arm of Absa Bank in South Africa, and promises to make Absa Capital "the best bank in Africa", The Times reported this week.

Barclays' South Africa branch was acquired by Absa on 1 January 2006. The Barclays Group, in turn, owns a 56.4% majority stake in the Absa Group. Barclays hopes that Absa Capital will offer services in debt financing initiatives in a wide range of global currencies.

The bank expects the operation to work for companies, governments, hedge funds, asset managers and institutions with a range of services in areas such as fixed income, derivatives, credit trading, commodities, collateralised finance, futures, loans and securitisations.

Spanish hedge fund activity heats up

After years of debate, Spain's regulators have approved a set of rules for hedge funds that should encourage the emergence of domestic specialists, and also allow foreign managers some access to Spanish markets.

Alex Henderson, business manager at recruitment firm Emerson Chase City, says regulations can only benefit the Spanish industry. "At the moment, the lack of regulation is a major factor restraining Spanish hedge fund growth and until the rules are in place, investors will be dubious about handing money over," he says. "This will absolutely impact Spanish hedge fund hiring."

UBS takes the gloves off in Russia

UBS is setting its sights on Russia in a bid for growth in new, riskier onshore markets.

Raoul Weil, head of UBS' wealth management business outside of Switzerland, told Dow Jones Newswires, "The attractiveness of Russia is the booming economy. There is a lot of wealth creation taking place, and it's relatively concentrated locally, so you don't need 20 branches to cover the market potential."

Weil's reference to '20 branches' is directly targeted at Deutsche Bank, which said last week that it would open 20 branches to serve Russia's high net worth individuals.

The move follows UBS's five-year push into select European private banking markets, including Germany, the UK, France, Italy and Spain, where the priority is now to "maintain the growth momentum," Weil says. UBS' build-up in Russia is likely to be modest initially, as it tests the waters in Moscow.

According to Weil, UBS has built up a compliance apparatus in Russia through its Russian investment banking business, UBS Brunswick, and has experience in applying tough compliance standards.