Deutsche Bank launches new private credit business
DEUTSCHE Bank is launching a new investment manager targeting private credit opportunities on behalf of institutional clients and high-net-worth investors.
DB Investment Partners (DBIP) will invest in corporate, real estate, asset-based, infrastructure and renewable finance lending opportunities, among other private debt strategies, according to a statement from the bank on Tuesday (Sep 12).
Other banks have bet on private credit this year, including JPMorgan Chase which invests from its balance sheet, and Societe Generale which has plans to raise a US$10.7 billion fund alongside Brookfield Asset Management. These, along with other new entrants such as Fidelity International and Ninety One, have seen the industry swell to US$1.5 trillion.
With the new venture, Deutsche Bank is making a foray into raising outside money for private credit. Among the large global banks, Goldman Sachs has succeeded in having a substantial presence in private credit lending via its asset management business, and often competes to participate in billion-dollar deals.
While some banks have set aside sums to lend through their own balance sheets, regulatory constraints make it challenging. There are stiff capital charges for holding loans for buyouts and highly-levered companies.
The German banking giant already invests in private debt through its balance sheet, but DBIP will operate independently of that business, the statement said. The bank does expect the new investment manager to benefit from dealflow generated through Deutsche Bank’s existing lending arms.
Raheman Meghji, previously a Deutsche Bank managing director, will be chief executive officer of the new firm, while Jon Aisbitt will be chair. Aisbitt has formerly acted as the chairman for Pension Insurance and Man Group.
Bloomberg News reported last June that Deutsche Bank planned to raise around 2 billion euros (S$2.91 billion) for a range of different credit strategies. BLOOMBERG
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