Deutsche Bank plans multi-strategy push into private credit

Bloomberg

Deutsche Bank AG is planning a fresh push into private credit across a range of strategies, according to people familiar with the plans.
The plans include raising money from external investors to expand its offering in the $1.2 trillion market. The lender is seeking to raise about 2 billion euros ($2.14 billion) initially from new and existing investors for a range of potential investments including
corporate, real estate, and distressed credit, said one of the people, who isn’t authorised to talk about it and asked not to be identified.
The push is being led by Raheman Meghji, a managing director at the bank, the person said. The team also includes Grzegorz Blicharz, a managing director and specialist in distressed debt and real estate, as well as Appu Mundassery, who was recently hired as a managing director to lead on corporate credit, the person said.
A spokesman for Deutsche Bank declined to comment on the move.
The move will allow Deutsche Bank to profit from the kind of investments it typically arranges for others, said the person. With a pool of capital to tap into, the bank will earn fees on managing the cash, as well as part of any extra return.
It will take the investment bank beyond so-called direct lending, with both higher-yielding credit opportunities and lower-return investments under consideration, said a second person familiar with the plans. The precise mix of investment strategies hasn’t been finalized because the plans are at an early stage and fundraising hasn’t yet begun, the person said. Deutsche Bank already has a mid-market direct lending unit within the bank’s wealth arm, a €902 billion
retail-focused asset manager.
It’s not without challenges. Tightly regulated banks operate in a more constrained way than either the large-scale asset managers or boutique credit shops that make up most of the fast-growing private credit market.
Goldman Sachs Asset Management is the biggest bank player in private credit. Credit Suisse Group AG announced a move into the area in 2020 while Barclays Plc is also
considering getting involved.