Deutsche Bank’s DWS cuts Asia private credit team in shift: sources

[SINGAPORE] DWS Group, an asset management arm of Deutsche Bank, has dismissed its Asia-Pacific private credit team as it removes the region from its global private credit strategy, according to people familiar of the matter.

Frankfurt-based DWS has cut the small team in recent weeks in Asia because the region remains less mature and structurally challenging compared with the firm’s stronghold in Europe, said the people, asking not to be identified discussing a private matter. DWS will continue pursuing private credit elsewhere globally, they added.

Private credit opportunities in Asia-Pacific are constrained by limited regulatory transparency and a fragmented legal framework, one of the people said, adding that the asset class also suffers from illiquidity.

A spokesperson for DWS declined to comment.

The decision comes as the US$1.7 trillion global private credit market faces mounting headwinds. Rising default warnings have fuelled concerns over underestimated risks, while deal flow in Asia-Pacific has slowed, forcing some managers to pause investments or rethink strategies.

Global investment firm Arena Investors is shutting its Singapore office and seeking to reallocate resources elsewhere, while Australian fund manager Tanarra Capital Pty. has halted new investments for its distressed credit fund, citing lack of viable opportunities.

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Despite the retreat from Asia private credit, alternative investments remain a growth driver for DWS in the region. The firm plans to add two alternatives coverage specialists in Singapore to focus on distributing its global private credit and real estate strategies, one of the people said.

In March, DWS and Deutsche Bank agreed to a private credit partnership aimed at combining origination and investment capabilities.

As part of that shift, the German bank wound down DB Investment Partners, an investment manager it had set up in 2023 to target private credit opportunities on behalf of institutional clients and high-net-worth investors. BLOOMBERG