Probably not (at least for now), that's according to Reuters, which describes investment banks as down, but not out.

With Lehman Brother trading at around half it's book value, and Merrill Lynch trading a little above that, both these firms are perhaps the most vulnerable to a takeover. Having said that, the news agency quotes Wesley Fredericks, a M&A partner at law firm Heller Ehrman, who said that although he feels some firms might 'need financial assistance.....What I see is a potential strategic investment more than a takeover'.

The news agency also reports that private equity firm Carlyle Group is to liquidate Carlyle-Blue Wave, its only hedge fund, after the fund failed to achieve 'critical mass'. The fund, which had assets worth around $900m at its peak, now manages $600m of debt and equity instruments. Carlyle said that there would be 'an orderly liquidation'.

Bloomberg reports that earning from AIG's alternative holdings (private equity and hedge funds) 'were probably close to zero in the second quarter', after coming in at $1.02bn in the same period 12 months ago. And, to make matters worse, the firm may have to writedown another $2.5bn for credit-defaults swaps in the second period, due to declines in the securities they guarantee.

The Wall Street Journal reports that Tullett Prebon confirmed Thursday that it is in merger talks with rival GFI Group. A combination of the two businesses would create the world's largest inter-broker dealer by headcount, and the second largest (behind ICAP) in terms of revenues and profitability.

Bloomberg reports that energy market Nymex Holdings said that second-quarter profit came in over double at $94.3m, as rising oil and precious metal prices boosting trading.

The New York Post reports that hedge funds like Jamie Simon's Renaissance Technologies might come unstuck because of US regulator the Securities and Exchange Commission's new requirement that firms actually borrow shares before they short company stock. Firms which use technology to rapidly buy and sell stocks are likely to be the most affected by the new rule. Previously, short-terms traders could avoid borrowing stocks by closing out their positions within a few hours or a day.

Finally, CNN reports that demand for bankers with structured credit skills is on the rise, as hedge funds and private equity firms look for good bargains that they can snap up from troubled investment banks. Pat Wieser, partner and co-head of global banking and markets executive search firm Rhodes Associates, said: 'People who know where the bodies are buried are pretty good hires'.

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