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In today’s newsletter:

• State Street wants in on private credit

• Germany’s business model stumbles

• Police search CVC and French football league

On the hunt for private credit managers

State Street’s asset management arm is looking to join the rush into private credit and infrastructure investing.

Yie-Hsin Hung, chief executive of State Street Global Advisors, told the FT it’s “shopping” for either a full acquisition or a minority stake combined with product partnerships.

“The area is so well established [and] given the size of our clients and their need to build and invest in a meaningful size, it I think just makes more sense for us to either partner or take a stake in a much more established firm where it’s one plus one equals three.”

The $4.7tn money manager is best known for its huge passive funds, including the world’s first exchange traded fund, and alternative assets account for less than 5 per cent of its assets under management.

But Hung, who took over as CEO two years ago, said the group sees unlisted assets as a potential area of growth.

The asset manager recently joined forces with Apollo to seek regulatory permission to offer an ETF that invests in both public and private credit. It has also teamed up with Galaxy Asset Management to offer three actively managed digital asset and disruptive technology ETFs.

Other mainstream asset managers such as Franklin Templeton, T Rowe Price and alternatives group Brookfield have already bought into the private credit trend.

There are only a few large independent private credit managers left, among them HPS, Sixth Street and Golub Capital.

One private credit executive who sold their business said last month that there were “slim pickings these days”. That means the competition for the independent managers that remain will be all the fiercer.

The FT has reported that HPS is in talks with BlackRock over a possible deal, while simultaneously considering an initial public offering or a minority stake sale. Hung declined to comment on HPS.

If HPS is spoken for, that just leaves Sixth Street and Golub potentially up for grabs — if they want to sell at all.

Germany’s great corporate engines falter

A few corporate sectors dominate in Germany: cars, chemicals and engineering have all traditionally been critical to the country’s economic wellbeing.

The success of the sectors over the decades has built the country into Europe’s traditional industrial powerhouse. Even when other economies sputtered, Germany was still often booming.

But now, all three are in a slump at the same time, creating a dire situation for Germany’s businesses and its workers.

Since 2021, Europe’s largest economy has slowly but steadily slid into crisis. Andreas Rüter, the country head of AlixPartners, is so overwhelmed by demand for restructuring that his advisory group is turning potential clients away.

There hasn’t been meaningful quarterly real GDP growth for three years, and the annual figure is set to decline for the second year in a row. Industrial production is down 16 per cent since peaking in 2017.

Some of the companies that are struggling are centuries old and have endured many vicissitudes.

Volkswagen has warned of plant closures. The 212-year-old Thyssenkrupp is bogged down in a boardroom battle over the future of its steel unit. Tyremaker Continental is seeking to spin off its struggling €20bn auto business.

Deutsche Bank’s Germany chief economist Robin Winkler labels the fall in industrial production “the most pronounced downturn” in the country’s postwar history. And he’s far from alone.

Eberhard Weiblen, chief executive of Porsche Consulting, warned that even in an optimistic scenario, producing small and medium-sized cars in Germany will become ever more difficult due to high labour costs and low profit per vehicle.

Volkswagen has long stopped producing its smallest model, the Polo, in Germany; Opel in 2019 stopped building the Corsa in Eisenach.

“Elon Musk might have been the last person in history to open a new mass-market car factory in Germany,” Weiblen said.

Police raids over football deal rock CVC

CVC Capital Partners’ deal with the French football league in Paris a couple of years ago was supposed to be the start of a lucrative partnership that turned round the league’s fortunes.

Yet that turnaround has not materialised, and now the two sides have been thrust into the spotlight. And not in a good way.

An investigation into potential corruption and embezzlement of public funds linked to the deal culminated with police raids of Ligue de Football Professionnel’s offices in Paris, and CVC, the Luxembourg-based private equity group.

French financial prosecutors are examining the allegations that centre on the deal struck between LFP, which operates the top two tiers of French football, and CVC to create a subsidiary to commercialise the broadcasting rights for French top-flight football games.

No charges have been brought, and preliminary investigations in France don’t necessarily mean there will be a trial.

The private equity group has invested in sports before, including Formula One. So when CVC invested €1.5bn to acquire a 13 per cent stake in the new broadcasting-focused vehicle, it was with the hope the deal would boost revenues.

But two years on, that hasn’t panned out. LFP head Vincent Labrune has struggled to find a reliable media partner to broadcast matches — even in France.

CVC wasn’t the only interested investor. Oaktree Capital and Silver Lake also made bids, but CVC beat them out by putting a slightly higher value on the league than the others, according to a French Senate report last week.

The stake sale came at a fragile time. LFP was grappling with dire financial problems caused by the Covid-19 pandemic and the collapse of its broadcast partnership with Mediapro.

LFP said it was “co-operating with the judiciary to provide all necessary information for the ongoing investigation with complete transparency”. CVC declined to comment.

Job moves

• Blackstone chief operating officer Chris James will become global head of the group’s $37bn in assets tactical opportunities unit. He succeeds David Blitzer, one of Blackstone’s longest-serving executives and a co-owner of the National Basketball Association’s Philadelphia 76ers, who will chair the unit.

• Baird has hired Andrew Lynn as a managing director in the group’s private capital markets team, where he’ll lead debt advisory in Europe. He previously worked for Alantra.

• Simpson Thacher & Bartlett has brought on Adam Cromie and Matthew Fisher as partners for the firm’s M&A practice. Cromie joins from Jones Day, while Fisher previously worked for Kirkland & Ellis.

Smart reads

End of an era Joe Biden launched a bold experiment with a bout of regulatory activism to curb corporate power, Lex writes. Whoever wins the presidential race, dealmakers will celebrate the end of Biden’s tenure.

Big spenders Donald Trump and Kamala Harris spent $3.5bn in the race for the White House, making it the most expensive US general election in history, the FT reports.

Victory lap On Monday, hours before the polls opened for the US presidential election, Fox chief executive Lachlan Murdoch sounded undeniably cheerful on a call with Wall Street analysts, the FT reports. He has reason to be upbeat.

News round-up

Six cities, one question: is China’s property market turning a corner? (FT)

Southern Water at risk of debt default in event of further credit downgrades (FT)

Netflix offices raided in Paris and Amsterdam over tax probe (FT)

Super Micro says review found ‘no evidence’ of fraud after auditor resigned (FT)

Apple warns investors future products may never be as profitable as iPhone (FT)

AI start-up Perplexity to triple valuation to $9bn in new funding round (WSJ)

Labour hedge fund donor’s profits drop 76% after restructure (FT)

German gas importer Uniper starts repaying €13.5bn bailout (FT)