Deutsche Bank Expands Private Credit Amidst Investor Concerns

Deutsche Bank is pushing forward with plans to expand its private credit offerings despite growing investor apprehension regarding credit quality within the sector. This move comes as the broader private capital industry faces increased scrutiny and redemption requests.

Deutsche Bank’s Private Credit Growth

As of the end of 2025, Deutsche Bank’s private credit portfolio reached €25.9 billion, representing a 6% increase from the previous year Financial Times. The bank’s asset management division remains committed to growing this segment through strategic partnerships with its corporate and investment banking arms.

Strategic Partnerships and Funds

Deutsche Bank has already established a collaborative agreement with its majority-owned asset manager, DWS, to jointly pursue private credit opportunities. In September, the two firms, along with Swiss private capital firm Partners Group, launched an evergreen private markets fund Financial Times.

Risk Management and Potential Challenges

Deutsche Bank emphasizes its application of “conservative underwriting standards” to its private credit exposures. However, the bank acknowledges potential “indirect credit risks” stemming from interconnected portfolios and counterparties. The bank’s share price experienced a decline of over 4% in Frankfurt trading, underperforming the Euro Stoxx Banks index, and has fallen by more than a fifth since the start of the year Financial Times.

Industry-Wide Concerns

The multitrillion-dollar private capital industry is currently navigating a challenging environment marked by a surge in redemption requests and heightened scrutiny of underwriting standards. Concerns have been amplified by the failures of auto parts suppliers and questions surrounding due diligence in corporate lending markets Financial Times. Failures of some US subprime lenders have further focused investor attention on risks associated with private credit and potential fraud.

Exposure to the Technology Sector

Deutsche Bank’s loan exposure to the technology sector increased by more than a third last year, reaching €15.8 billion. The bank has been exploring hedging strategies for its exposure to data centers, driven by substantial debt extended to support the growing demand for artificial intelligence and cloud computing infrastructure Financial Times. Concerns are rising about a potential bubble forming due to the scale of investment in AI infrastructure.

Legal Battles

Deutsche Bank is facing a lawsuit exceeding £600 million from four former employees who allege damages related to a 2019 Italian court conviction stemming from an internal probe. The bank maintains that the claims are “without merit” and intends to vigorously defend itself Financial Times.