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Groups to launch €10bn fund that will also target renewable energy and transport

Société Générale and Brookfield Asset Management are to team up for a €10bn fund in the fast-growing, private credit market as the French bank’s chief executive Slawomir Krupa looks to shake up the lender.

The groups said the fund, to launch with €2.5bn in capital, would grow to €10bn over the next four years. It would target renewable energy and transport companies as well as the finance sector, SocGen and Brookfield said. 

The move follows a big expansion of private credit markets as rising interest rates push up borrowing costs and hamper access to bank loans for some small and midsized companies.

Large hedge funds have been increasing their presence in the $1.5tn sector, which had already developed strongly as an alternative to bank loans, partly as a result of tightening financial regulation.

For SocGen, the tie-up marks a shift under Krupa after the French lender gradually exited its asset management operations in recent years. It ended its involvement with the asset manager Amundi when it was listed in 2015, leaving rival bank Crédit Agricole as the controlling shareholder. It sold most of its Lyxor operations to Amundi in 2021.

Krupa, who is set to unveil the pillars of his new strategy next week, took the reins at SocGen after 15 years of Frédéric Oudéa’s tenure, with pressure to try to lift the bank’s shares after years of relative underperformance compared with peers. The company’s shares have never recovered to the levels reached before the 2008 financial crisis and a rogue trading scandal the same year.

The former head of SocGen’s investment bank and a veteran of the lender, Krupa is expected to take a slightly different tack, including with some of the partnerships he is forging.

He has close relationships with a number of large New York-based fund managers after a period working in the city, according to people close to him. Brookfield’s chief executive Bruce Flatt is among them.

In November last year, when Krupa was already chief-executive-in-waiting, SocGen agreed to merge its equities research and cash equities business with US investment company AllianceBernstein, in a deal he also shepherded.

In the new private credit partnership, SocGen and Brookfield said they would provide “investment-grade financing options”. They said they would combine their expertise, including the French bank’s capabilities in assessing and approving loans and the asset manager’s capabilities marketing the products to end investors.

SocGen and Brookfield said the fund was expected to meet the needs of insurance companies for investment-grade products.

Investment managers such as Blackstone have flagged a “golden moment” for private credit in recent months, including in the US as regional banks pull back on some of their lending.

However, that has prompted calls for more oversight of the industry. In the EU, member states are looking at new legislation with some restrictions on the amount of borrowed money that private debt funds can invest.

‘He is driven by demons’: biographer Walter Isaacson on Elon Musk

The writer tells Gillian Tett what he learnt during two years spent with ‘total access’ to the tech tycoon

BMW to produce two new models co-developed with China from 2026

BMW will invest more than £600mn to produce electric Mini cars in Oxford, safeguarding the historic plant and delivering a vote of confidence in the UK’s auto industry.

The investment by the German carmaker at the site in Cowley will be backed by about £75mn of taxpayer funds, according to people familiar with the matter. Production of two new models will begin in 2026, though BMW plans to import batteries for the cars from Europe or China.

The plant’s future has been under threat since BMW said last year that it would cease production of the first electric Mini model there, leaving the factory reliant on petrol cars, which the German group has promised to phase out by 2030.

Under the plan, BMW will manufacture two new electric models, the 3-door Mini Cooper and the new, smaller Mini Aceman at Oxford.

“With this new investment we will develop the Oxford plant for the production of the new generation of electric Minis and set the path for purely electric car manufacturing in the future,” said BMW’s head of production Milan Nedeljković.

The two models are based on a system developed by BMW and China’s Great Wall Motor, and will be produced in China at a new jointly owned plant from next year. Despite using Great Wall technology, BMW had “no plans” to manufacture the Chinese brand’s cars at the UK plant in the future, Nedeljković said.

Prime Minister Rishi Sunak hailed the decision by BMW as “another shining example of how the UK is the best place to build cars of the future”.

The move by BMW is a much-needed fillip for Britain’s car industry. Production has fallen 40 per cent since the start of the coronavirus pandemic, following plant closures, global parts shortages and decisions by some manufacturers to shift models overseas, though electric production has increased because of rising demand.

The government has set aside £1bn to try to spur investment in battery technology and to attract new manufacturers such as Tesla. Despite recent investments from Jaguar Land Rover and its owner Tata Motors, as well as Nissan, Stellantis and now BMW, none of the new major entrants has decided to build in the UK.

China’s BYD said this year that Brexit meant the UK was not even in the top 10 locations as it considered a site for a European plant.

The fresh investment will also allay fears over the strategic importance of Cowley to BMW. As well as making the same electric Mini models in China with Great Wall, BMW will make the Mini Countryman, its high-riding version, in Leipzig, Germany.

“Oxford is and remains the heart of the brand,” said Mini head Stefanie Wurst. 

Nedeljković said that the Oxford plant would still export globally, even though the Chinese plant that will also build electric Minis benefits from lower manufacturing costs. 

Business secretary Kemi Badenoch said that the car industry was “one which is very critical to the UK economy and which is facing a lot of headwinds”.

She said there was “no point” having net zero targets if they were impossible to meet, and said the government would remain “flexible” towards its goals.

“At the moment, China is leading this technology, we wouldn’t be able to get to where we want to on net zero by stopping or banning Chinese products, that’s certainly not where we are on it,” she said.

“We are ensuring that we can keep the commitments that we made on net zero, but we are also looking as much as possible to diversify our supply chain.”

Ministers are finalising plans for a China-style EV sales quota scheme that will come into force in January. The industry has asked that the rules, which are set to require 22 per cent of car sales to be zero emission next year, rising every year in this decade, be delayed. 

Badenoch said the government realised the transition would not be easy. “What we are working on is how we can be as flexible as possible in order to make it easier for people to adjust.”

Alongside the Oxford plant, BMW also owns an engine factory in Hams Hall, a metalworks plant in Swindon and the luxury car brand Rolls-Royce.

The move by BMW comes as the UK’s car plants seek investment to build electric models as the industry shifts from traditional combustion engines.

Last week, Vauxhall owner Stellantis began producing electric vans at Ellesmere Port, following an investment of about £100mn that saved the site from closure.

JLR is investing about £15bn in new electric models to be built in the UK, while parent group Tata this summer announced a £4bn investment into a new battery plant, which will use Chinese technology at first, to support JLR’s electric models.

Nissan, which runs the UK’s largest car plant, has invested about £1bn with its battery partner AESC, which is owned by China’s Envision. The Japanese group has committed to producing at least one new electric model in Sunderland. The Financial Times reported earlier this year that the company was looking at future models for the site as well.

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Greek director Yorgos Lanthimos takes home top prize five years after coming second with ‘The Favourite’

It was never in much doubt. Yorgos Lanthimos’s audacious, sexy, troubling surrealist parable Poor Things has won the Golden Lion at the Venice Film Festival. The Greek director’s exuberant adaptation of Alasdair Gray’s 1992 novel established itself as a critical darling early on in this year’s event and clearly also dazzled the Venice jury, led this year by La La Land director Damien Chazelle. The victory means that Lanthimos goes one better than five years ago when The Favourite came second to Alfonso Cuarón’s Roma.

That year, Olivia Colman took home the Best Actress prize and repeated the feat at the Oscars six months later. Stone will be a strong contender to win her second Oscar (after La La Land) next year, though in Venice she was beaten to the Best Actress prize by Cailee Spaeny for her gently nuanced work as Elvis Presley’s woebegone wife in Sofia Coppola’s slightly underpowered Priscilla. Peter Sarsgaard was named Best Actor for his performance opposite Jessica Chastain in Michel Franco’s Memory, a New York-set story of trauma and recovery from Mexico’s master of grim intensity (Chronic, New Order).

Japan’s Ryusuke Hamaguchi (Drive My Car) picked up a rightful runner-up Grand Jury Prize for Evil Does Not Exist, his fascinating drama exploring the arrival of glamping and urban greed in a small rural town. A baffling Best Screenplay went to Guillermo Calderón and Pablo Larraín for the underwhelming El Conde, a vampiric satire directed at former Chilean dictator Augusto Pinochet.

Two films casting light on the global migrant crisis also fared well. The third-place Special Jury Prize went the way of Green Border, a well-reviewed drama by Poland’s Agnieszka Holland (Europa Europa), set in the border region between her country and Belarus. Meanwhile, the Silver Lion for direction was claimed by Matteo Garrone for Lo Capitano, which follows a Senegalese teenager desperately striving to reach Europe. He is played by Seydou Sarr, who also won the Best Young Actor award. It marks a change of pace for Garrone, better known for tough crime dramas such as Gomorrah and piquant fantasies such as Tale of Tales and Pinocchio.

In an 80th edition of the festival diminished at times by the ongoing American actors’ and writers’ strike, it was left to Sarsgaard to address the issue of contention, in particular Hollywood’s use of AI. “We all here agree that an actor is a person and a writer is a person, but it seems we can’t, and that’s terrifying because this work is about connection,” he said. “Without that . . . this holy experience of being human will be handed over to the machines and the eight billionaires who own them. So if we lose that battle in the strike, our industry will be the first of many to fall.”