Oaktree’s Italian football advancement

One scoop to begin: The consortium behind the planned $23 billion port contract, which includes representatives from Swiss and Italian shipping company MSC and US asset manager BlackRock, discussed with Chinese competition regulators as they attempt to navigate tensions between Washington and Beijing in the Panama Canal.

One research paper: Bayes Business School and Independent Investment Management Initiative delves into the world of independent asset management boutiques. This paper looks at some of the competitive advantages that boutiques believe they are beyond the larger fundhouses, and some of the obstacles they face.

In today’s newsletter:

Off-field challenges for Oaktree, owner of Inter Milan

Japan’s ambition to become an asset management country

The correlation between the dollar and the Treasury yields collapses

Oak Tree Turnaround Plan for Inter Milan

On Saturday evening, Qatar-owned Paris Saint-Germain won the Champions League for the first time, winning the aging Milan side at Allianz Arena in Munich. The 5-0 scoreline was the widest margin in the Champions League final.

Overseeing the rebuilding of an aging team and revising the club’s finances and commercial operations are just some of the challenges facing Oaktree Capital, the new owner of Inter, as explored in this deep dive.

The $200 billion US suffered debt investor controlled Inter a year ago as former owner, Chinese retailer Sunning, failed to repay the 400 million euro loan protected from control of the club, valued at around 1 billion euros at the time of the ownership change.

“Oaktree did something smart. They seized it on a cheap,” said the owner of a rival European Football Club.

After acquiring the business, Oaktree began with a 100-day plan, following a typical playbook for the investment industry.

According to one person familiar with the situation, 12 months later it will be behind schedule. He found things took longer than expected in Italy, but said the vision of how Intel would enhance financial and operational stability remains unchanged.

Oaktree was trying to change “people and attitude,” the person said. The club announced a new board meeting last June, which includes several representatives from the company, promoting former manager Giuseppe Marotta to president and chief executive.

Management tried to focus on maximizing revenue by renegotiating contracts with existing sponsors, finding new commercial partners, and identifying growth opportunities.

Looking further, one of the most challenging tasks for Oaktree, and one of the club’s most challenging tasks, is to build a new stadium to replace the increasingly dilapidated Sansilo, home to both Inter and AC Milan.

Destroying an iconic venue is full of challenges, from planning and fundraising to local politics. “To talk about knocking down San Siro from time to time was like talking about knocking down the Colosseum,” said someone familiar with the situation.

Read the full story here

Daiichi’s Life in Japan Buying 15% Shares in M&G

The Japanese government has spoken out about its ambition to turn Japan into a “asset management country.”

The revival of inflation and the rapidly aging population are urging property managers and insurance companies to build expertise and deepen international relationships. The idea is to provide them with access to new markets and bring their knowledge home.

This told me something like an alliance between Japan’s financial services group and US and European players. This is a trend that appears to be gathering momentum. Often, the form they take is not a (more dangerous) full-scale mergers or acquisitions, but a minority interest or strategic partnership.

Latest example? Daiichi Life, one of Japan’s largest life insurance companies, is set to acquire a 15% stake in UK asset manager M&G, announced by the two companies on Friday.

This will make Dai-ichi Life the largest shareholder of the FTSE 100 companies and become the Japan Group’s preferred asset management partner in Europe as part of the partnership.

“This partnership is about growth, distribution and product development,” M&G CEO Andrea Rossi told The Financial Times. “It will accelerate growth ambitions in the international and private markets and provide distribution access to Japan and Asia, which we want to expand.”

Dai-ichi CEO Tetsuya Kikuta said the partnership “will spearhead the development of its presence in Europe and the UK as well as accelerate our strategy to become a global top-tier insurance group.”

The transaction follows a surge in activities involving Japanese companies on both sides of the Atlantic.

Nomura’s April contract to buy Macquarie’s US and European public asset management operations for $1.8 billion was the largest international expansion since Lehman Brothers. That followed life insurance company Yasuda, who said in February it plans to buy around 5% of the law and the general public.

Meanwhile, last year, Mizuho Financial Group purchased a minority stake in credit asset manager Golub Capital, European alternative player Tikehau Capital formed a strategic partnership with Japan’s Nikko Asset Management, while Dai-Ichi Life also purchased a minority stake in Los Angeles-based alternative investment manager Canyon Partners.

Which company will make the next transaction? Email me: harriet.agnew@ft.com

This week’s chart

In response to President Donald Trump’s volatile policymaking, London’s Emily Herbert wrote, the close relationship between US government bond yields and the dollar collapsed as investors calmed down American assets.

Government borrowing costs and currency values ​​have tended to take a step forward from each other in recent years, with higher yields usually showing strong economies and attracting influx of foreign capital.

However, since Trump’s “mutual tariffs” were announced in April, yields have risen from 4.16% to 4.42% over the 10-year period, while the dollar has dropped 4.7% against the basket of currencies. This month, the correlation between the two fell to its lowest level in nearly three years.

“In normal circumstances (higher yields) are a sign that the US economy is working strongly. This is attractive for capital inflows into the US,” said Shahab Jalinoos, head of UBS’s G10 Forex Strategy.

But “if yields rise due to fiscal concerns and policy uncertainty, US debt is more risky, the dollar could be weakened at the same time,” he said.

The President’s “big and beautiful” tax bill, along with the recent downgrade of Moody’s US credit rating, has led to a sharper focus on deficit sustainability for investors, focusing on bonds.

An analysis by Apollo Chief Economist Torsten Sløk suggested that the US government’s credit default swap spread (which reflects the cost of protecting loans from defaults) is trading at a similar level as Greece and Italy. Trump’s attack on Federal Reserve Chairman Jay Powell also surprised the market.

“The strength of the US dollar comes in part from its institutional integrity: its rule of law, central bank independence and predictable policies,” said Michael de Pas, head of global rates at Citadel Securities.

“The last three months have questioned that,” he added.

This week’s 5 unacceptable stories

Jamie Dimon warned that the US bond market will “crash” under the weight of the country’s rising debt, as JPMorgan Chase boss called on Donald Trump’s administration to place America on a more sustainable trajectory.

The US has opened the door to Americans buying crypto tokens in retirement accounts, highlighting how Donald Trump is taking a much more tolerant approach to digital assets than his predecessor, Joe Biden.

Dan Olley, CEO of Hargreaves Lansdown, will leave the UK’s biggest investment site less than two years later, following a £5.4 billion private equity takeover. He passes the reins provisionally to Richard Flint.

Rachel Reeves has vowed to unlock more than £50 billion in investments in domestic infrastructure, housing and fast-growing businesses, making it acknowledged that it will create the power of a “backstop” to force a large pension fund to support UK assets.

The unfortunate returns from private equity investments meant that Canada’s Pension Plan Investment Board, Ontario Teacher Pension Plan and Quebec’s Kayce des deport Essment du Quebec were inadequate last year.

And finally

A curated selection from an extraordinary collection of art dealers is under Sotheby’s next week’s hammer, from Renaissance masterpieces to contemporary British art. This 2021 interview with Katz tells the story of how he transformed into a legendary figure in the art world from the age of 18, “who even knew what a work of art was.”