DWS Group, Deutsche Bank’s Frankfurt-based asset management firm, is struggling to attract significant commitments for its private credit fund, which has a €1.0bn ($1.05bn) target, according to a report by Bloomberg.
The report cites unnamed sources familiar with the matter as revealing that while Stefan Hoops planned to make DWS a keep player in the $1.6tn private credit space when he took over as CEO in 2022, the firm has struggled to make a mark in this increasingly crowded space, with senior sales staff leaving for higher pay at US rivals.
Despite the headwinds, Hoops remains focused on his goal with one possible approach being to leverage Deutsche Bank’s extensive client relationships for direct lending opportunities.
A spokesperson for DWS declined to comment on the current state of its private credit business, and while DWS has reported overall growth, including a 16% increase in assets under management to €963bn by September 2024, much of this increase has been in passive funds with lower margins.
In addition to difficulties in raising funds, DWS has experienced attrition within its sales team. Notably, two senior sales staff — Nestanlin Garcia, who handled alternatives client coverage in Germany, Austria, and Central Eastern Europe, and Alexander Hütteroth, who oversaw private debt in the region — left for roles at Blackstone and Brookfield Asset Management, respectively.
To bolster growth, DWS has made several strategic hires, including Paul Kelly from Blackstone to run its alternatives unit and Dan Robinson from Man Group to lead the firm’s European alternative credit business. The firm is also launching its first collateralised loan obligation (CLO), Rhine CLO I, in an effort to expand its product offering.
