Germany’s federal government is preparing to launch a new state-backed investment vehicle aimed at mobilising up to €130bn of private capital, as Berlin steps up efforts to attract private equity and alternative asset managers into higher-risk domestic projects, according to a report by the Financial Times.
Deutschlandfonds will be anchored within state development bank KfW and led by its Chief Executive Stefan Wintels. The fund is expected to be seeded with around €30bn in public capital and loan guarantees, with the aim of bringing private capital investors into sectors including technology, defence, energy infrastructure, and critical minerals.
The initiative comes amid rising interest from global buyout groups, with US firms including KKR and Apollo understood to have held discussions with German officials in recent months.
The Deutschlandfonds forms part of Chancellor Friedrich Merz’s broader strategy to revive Europe’s largest economy through a combination of large-scale public spending and private capital mobilisation. The government has already outlined plans for more than €1tn of public investment over the next decade, focussed on infrastructure and defence, but is seeking to leverage private equity capital to amplify their impact.
An official announcement from the finance and economy ministries on the new vehicle is expected this week.
