Analyst upgrades:

• Friedman Billings upgraded Synovus (NYSE: SNV) to Market Perform from Underperform on valuation following the recent weakness. BASF (OTC: BASFY) and Akzo Nobel (OTC: AKZOY) were upgraded to Buy from Neutral at UBS on valuation and believes cash flows can cover the company's dividend.
• JP Morgan upgraded H.B. Fuller (NYSE: FUL) to Overweight from Neutral citing benefits from lower raw material costs.
• CA, Inc (NASDAQ: CA) was added to Goldman's Conviction Buy List.
• Goldman removed Boeing (NYSE: BA) from the Conviction Sell List.
• WABCO Holdings (NYSE: WBC) was upgraded to Buy from Hold at KeyBanc.

Analyst downgrades:

• Oppenheimer downgraded Giant Interactive (NYSE: GA) to Perform from Outperform following the company's Q3 results as they believe a recovery of revenue from ZT Online will take longer than expected.
• Friedman Billings cut Walter Industries (NYSE: WLT) to Market Perform from Outperform as they believe the decline in steel demand will pressure met coal prices. The company's target was lowered to $30 from $53.
• Citigroup downgraded shares of Atlas Pipeline (NYSE: AHD) Holdings to Sell from Hold as they believe the company could potentially be in violation of its debt covenants as early as Q1. The company's target was lowered to $4 from $31.
• Oracle (NASDAQ: ORCL) was removed from Goldman's Conviction Buy List.
• Dover (NYSE: DOV) and Emerson Electric (NYSE: EMR) were downgraded to Underweight from Neutral at JP Morgan.

Analyst initiations:

MAJOR PAPERS:

• The Wall Street Journal reported that after years of rapid grows, many hedge funds are shutting their doors or merging with others, as expansion has dramatically slowed. As a result, the industry is being dominated mostly by big firms, such as Och-Ziff Capital Management Group LLC (NYSE: OZM), D.E. Shaw & Co., and Paulson and Co.
• Shares of Ctrip.com International Ltd (NASDAQ: CTRP), China's major Internet travel booker with about 58% of the country's online travel business, have dropped about 30% in the last six weeks alone creating a possible buying opportunity, according to the Wall Street Journal's "Heard in Asia". Travel in China is expected to grow solidly in the long-term and Ctrip.com said it expects revenue to grow 30% for the three months ending June 30 from a year earlier.
• In a move that could potentially usher in a new phase in the credit crunch, the Financial Times reported that The Goldman Sachs Group Inc (NYSE: GS) is said to be close to finalizing a plan to restructure a $7B investment vehicle formerly run by Cheyne Capital, a London-based hedge fund.

OTHER PAPERS:

• The Washington Post reported the proposed merger between XM Satellite Radio Holdings Inc (NASDAQ: XMSR) and Sirius Satellite Radio Inc (NASDAQ: SIRI) was under fire yesterday by senior members of the Congressional Black Caucus, who said the deal does not provide enough opportunities for minority-owned programming.

It's a forgotten continent but Africa holds lots of potential. There are opportunities for infrastructure investments. What's more, with the surge in commodities prices, there has been an influx of capital.

We are already seeing some dealmaking: the biggest wireless carrier in Africa, MTN Group, appears to be in talks for a merger with Reliance Communications.

Now there may be another deal. It looks like Telkom (NYSE: TKG), a South African fixed-line operator, is in play. A group of players -- Mvelaphanda Holdings, Och-Ziff Capital Management (NYSE: OZM) and other strategics – are interested in purchasing the company. Although, there is a hitch: Telkom needs to unload its wireless unit, Vodacom Group, which is a joint venture with mighty Vodafone (NYSE: VOD).

And it becomes even more complex as South Africa owns 38.9% of Telkom, which can slow things down. What's more, it will not be easy coming up with an agreeable valuation.

However, investors are optimistic. In Monday's trading, Telkom's shares were up 6.79%.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Over the past few years, we've seen a flood of special purpose acquisition company offerings (or SPACs). Basically, these are public companies that raise money to pursue acquisitions. It's a way to provide targets with some liquidity as well as a public vehicle (to do things like buy other companies).

Well, today Alternative Asset Management Acquisition Corporation (AMEX: AMV) – which is an SPAC – announced that it is merging with Halcyon, which is an alternative asset manager (founded in 1981). The deal comes to about $974 million (including $505 million in cash and notes).

Halcyon, which manages $11.5 billion in assets, operates a variety of hedge funds. In fact, some of its strategies focus on "stressed/distressed" debt categories, which has become a popular spot lately.

Then again, as seen with other publicly-traded alternative assets managers – like Blackstone (NYSE: BX) and Och-Ziff Capital Management (NYSE: OZM) – it's been challenging.

In today's trading, Alternative Asset Management's stock price is up about 2.15% to $9.50 (keep mind that the company went public at $10 per share).

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

For hedge funder operator Och-Ziff (NYSE: OZM), it's been a wild ride since its IPO in November, mostly downhill. The company's stock price has gone from $32.80 to $20.02.

But this week things have been improving. Och-Ziff announced a fairly good earnings report. For example, the firm posted distributable earnings of $505.5 million, or $1.27 per share. What's more, assets under management spiked 48% to $33.4 billion.

Yes, with such amounts, it doesn't take too much work to generate juicy fee income. And Och-Ziff has produced consistent returns. Keep in mind that the firm has an opportunistic approach to investing, which includes exotic strategies and broad global reach.

And yes, the firm thinks that the recent market turbulence is presenting some good investment options. Och-Ziff said it plans to devote 10% of its $20 billion OZ Master Fund to the beaten-down credit market -- including even residential mortgages.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

MOST NOTEWORTHY: Och-Ziff Capital, FactSet, Forest Labs and certain optical component maker and provider stocks were today's noteworthy initiations.

• Och Ziff Capital Management Group (NYSE: OZM) was initiated with an Overweight by JP Morgan, which believes the company should be able to better sustain and build its earnings power than traditional asset managers in the challenging market conditions.
  
• JP Morgan started FactSet Research Systems (NYSE: FDS) with a Neutral, as the firm is looking for a better entry point given the probability of an upcoming financial data and analytics spending slowdown.
  
• Forest Labs Inc. (NYSE: FRX) was initiated with a Buy by Roth Capital, which cited Lexapro and the company's near-term EPS as reasons for the rating.
  
• Thomas Weisel initiated optical component maker and provider companies Avanex Corp. (NASDAQ: AVNX), Bookham Inc. (NASDAQ: BKHM), Finisar (NASDAQ: FNSR), Optium Corp. (NASDAQ: OPTM), Opnext Inc. (NASDAQ: OPXT), and Oplink Communications Inc. (NASDAQ: OPLK) with Market Weight ratings, as the firm expects the unfavorable industry structure to create margin volatility.

OTHER INITIATIONS:

• JP Morgan assumed coverage of American Express Co. (NYSE: AXP) with an Overweight rating.
• Morgan Stanley initiated Eagle Bulk Shipping (NASDAQ: EGLE) with an Equal Weight.

Just imagine if hedge fund giant Och-Ziff (NYSE: OZM) went public earlier this year. It certainly would have been a stellar performer. Unfortunately, the public offering came Wednesday with the stock falling 4.2% to $30.65.

Ironically, Och-Ziff seems well-positioned for the volatile markets. Since 1994, the CEO of the firm, Daniel Och, has built a global franchise that spans the markets in the US, Asia and Europe. What's more, he has taken a multi-strategy approach, which involves merger arb, convertible arb, equity restructuring, distressed credit investments and so on.

More importantly, Och-Ziff is a big believer in strong risk management. In fact, this was a key for the firm's strong performance in 2001-2002.

As a result, Och-Ziff has picked up a large amount of assets (the current amount is about $30 billion). In fact, the mega sovereign fund, Dubai International Capital, agreed to invest $1.15 billion in the firm.

With the awful performances of the IPOs of Blackstone (NYSE: BX) and Fortress (NYSE: FIG), it was no surprise that Wall Street was lukewarm on Och-Ziff. Taking the long view on things, however, the growth prospects look promising as major investors seek out diversified alternative asset managers.

The lead underwriters on the Och-Ziff deal include Goldman Sachs (NYSE: GS) and Lehman Brothers (NYSE: LEH).

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

Within a week or so, the hedge fund Och-Ziff should have its IPO. But the firm is already raising lots of dough.

That is, Och-Ziff has announced that Dubai International Capital LLC has invested $1.26 billion in the firm. This amounts to a stake of 9.9% and a price per share of $33.

Keep in mind that the current price range on the offering is $30-$33.

With the Middle East bulging with dollars, it's no surprise that we are seeing reinvestment back into the US. After all, Carlyle recently snagged $1.35 billion from Abu Dhabi.

And, of course, Blackstone Group (NYSE: BX) snagged $3 billion from the Chinese government (which also has tons of cash).

Och-Ziff Capital, a hedge fund with $26.8 billion in assets, got its start 13 years ago. The founders include Daniel Och, a former operator at Goldman Sachs Group (NYSE: GS), and members of the Ziff family. Apparently, now it's time to take some money off the table, and Och-Ziff has filed to go public.

The goal of the fund: "Deliver consistent positive, risk-adjusted returns throughout market cycles, with a focus on risk management and capital preservation." However, if you look at the average returns for the past three years -- 12.2% -- you could have actually done just as well with an S&P 500 index fund (and not have had to pay the hefty fees or agree to lockups). But, hey, in the rarefied world of the wealthy, things don't always make much sense.

The lead underwriters include Goldman Sachs and Lehman Brothers (NYSE: LEH). The proposed ticker is OZM, and the prospectus can be reviewed on the SEC Web site.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.