However Jon Moulton head of Alchemy the venture capital group that is also interested in buying the

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However, Jon Moulton, head of Alchemy, the venture capital group that is also interested in buying the company, said: "I heard from several sources that Carpetright had been advised that they would have OFT problems."Mr Moulton confirmed that Alchemy is "still interested in proceeding" with an offer for Allied Carpets. It is understood to have made an earlier offer of around 55-60p per share. This would have led to an almost certain referral to the Monopolies and Mergers Commission. After seeking confidential guidance from the OFT it is understood that Carpetright decided not to proceed with its offer. Instead, Carpetright completed a deal earlier this week paying Allied Carpets pounds 14m for 29 branches of Carpetland and Harris Carpets. That deal pushes the group's share of the UK carpet market to around 14 per cent, compared with Allied Carpets' 11 per cent.Shares in Allied Carpets, which is still trying to recover from accounting irregularities, closed unchanged at 53p yesterdayCarpetright refused to comment on any possible interest in Allied Carpets yesterday.

Carpetright expressed an interest in acquiring Allied Carpets for 67p per share, valuing the struggling retailer at pounds 60m. The deal would have give the enlarged business 25 per cent of the UK carpet market, far ahead of its nearest rival. CARPETRIGHT, the carpet retailer run by Lord Harris, has been turned down by the Office of Fair Trading in its attempts to buy its main rival, Allied Carpets. "The Imro stamp is a very good one," said Mr Pictet.He said bombed-out markets such as Korea and Thailand were already showing flickers of life. "The fact that so many funds have pulled back creates opportunity."Mr Pictet cites holding companies in countries such as Turkey and Israel, whose discount to the value of quoted operating subsidiaries has widened from an average of 20 per cent to 40 per cent, as anomalies to exploit.There has been a similar dramatic widening in discounts in emerging market investment trusts."The Korean won is up 25 per cent against the dollar since August, so capital must be going back in," he said, adding that the recoveries, when they come, will be very sharp.. It includes Jonathan Neill, formerly of Mercury Asset Management, and Albert Saporta from AIM&R, one of the biggest UK-based hedge funds.The fund has had approvals from both the UK's Investment Management Regulatory Organisation and the Dublin stock exchange. Mr Pictet says he has put two-thirds of his own net worth into the fund. By adopting a hedge fund strategy and taking arbitrage and short positions in these markets, he hopes to turn the volatility which has wiped out conventional investors in these markets to the fund's advantage.

"We are aiming to deliver 25 per cent returns with the kind of volatility normally associated with government bonds," he said.Those returns will not come cheap: the firm will take a cut of 20 per cent of annual profits on top of a 1.75 per cent management fee.Mr Pictet said London had been chosen as an operational base rather than Geneva or New York because of the depth of emerging market talent there The firm consists of 12 people, of whom eight are partners. Mr Pictet, who today begins marketing to wealthy individuals and sophisticated investors in the UK, Europe and North America with $1m or more to spare, plans to exploit the emerging markets dislocation to get into markets in Asia and eastern Europe while prices are still low. FABIEN PICTET, a member of the Swiss private banking dynasty, is planning to set up a $150m (pounds 90m) emerging markets hedge fund in London next month. However, earlier this year it failed to complete the takeover of the building society, Birmingham Midshires, after being outbid by Halifax.Outlook, page 23. Sir Iain has never publicly commented on the possibility of his taking over the chairmanship of RBS, but he known to be keen on the idea. "It is a live issue at the moment," said one source close to the bank.Dr Mathewson, 58, could find himself in a difficult position if the succession is settled in Sir Iain's favour before his term as chief executive of RBS is complete.Dr Mathewson and Viscount Younger are said to share the same strategic views for the bank. "You could not put a cigarette paper between them," said one observer.