In this exclusive interview, Head of Investment Management, Emerging Markets at Deutsche Bank Private Bank shares how he and his team are guiding clients through the growing complexity of private credit. He talks about what sets strong managers apart, why investor interest in Europe is rising, and how attitudes toward Asia are slowly shifting. He believes lasting success comes down to discipline, preparation, and building relationships that hold steady—whatever the market brings next.
As the private credit market becomes more crowded, distinguishing long-term opportunities from short-lived momentum plays has become a key challenge for investors. According to Gian-Maria Piccolo, Head of Investment Management, Emerging Markets at Deutsche Bank’s Private Bank, the solution lies not just in past performance—but in a manager’s ability to adapt to what comes next.
“We tend to select managers with clear, distinguished competencies and capabilities in their investment space, with a long, solid and proven track record,” Piccolo says. “But we want to go beyond what they did in the past. Our focus is to imagine how they could realistically adapt to a different, future market environment.”
That forward-looking mindset has become more urgent as signs of a late-cycle market accumulate. While this phase could stretch out, Piccolo cautions that a shift is inevitable—and likely more demanding.
“Whatever comes next will certainly be a more difficult environment than today’s”, he says. “Capabilities and portfolio management skills acquired recently will not necessarily be enough. That is why we think partnering with established, blue-chip providers offers a better risk-adjusted value proposition for our clients.”
“Whatever comes next will certainly be a more difficult environment than today’s” – Gian-Maria Piccolo, Deutsche Bank Private Bank
What sets these blue-chip firms apart, he argues, is not only their scale but their depth of internal expertise—something especially relevant in longer-term strategies like private credit.
“In private markets in general, the ability of blue-chip managers to tap into a large pool of internal expertise—beyond the specialisation of a single fund—will be a critical differentiating factor from now on.”
Europe rebounds, Asia treads carefully
While manager quality remains central, investors are also re-evaluating where their capital goes. The US continues to dominate private market allocations, but sentiment around Europe has changed significantly in 2025—driven in part by policy reform and fiscal announcements.
“At the beginning of 2025, Europe was not seen as a particularly appealing region to invest in,” Piccolo says. “All the recent macro and geopolitical events—above all the announced spending plans and reforms in Germany—have completely changed the perception of the continent. Now it enjoys much higher appeal and interest from Asian investors.”
Interest in Asia-Pacific is also growing, but allocations remain cautious. Many clients are still most comfortable investing close to home, especially in private markets, where information asymmetry and perceived risk remain barriers.
“There is an emerging trend of interest in local Asian markets, but with a strong level of home bias,” he adds. “Clients are contemplating opportunities beyond the US and Europe, but only if there is a strong element of personal proximity to the country. That helps close the knowledge gap and makes the opportunity feel more tangible.”
This cautious optimism, he suggests, underscores the continuing role of private banks in helping clients navigate unfamiliar terrain—through local insight, access, and advisory continuity.
From private equity to private credit
Investor behaviour within private markets is also evolving. While private equity remains a core holding, Piccolo has observed a subtle but telling shift where more clients are reallocating proceeds from private equity into private credit, rather than making fresh PE commitments.
“We’ve seen clients receiving proceeds from private equity investments and allocating those proceeds into private credit strategies,” he says. “This is actually an investment behaviour we welcome.”
The shift, he explains, reflects a growing awareness of private credit as a distinct pillar of portfolio construction—rather than a substitute for traditional fixed income.
“We encourage clients to think about their allocation to private markets as a stand-alone,” he says. “Not, for example, as part of their liquid fixed income portfolio.”
This trend is backed by research. According to Preqin’s Global Private Debt Report 2025, investor appetite for private credit continues to rise, with fundraising for private debt vehicles outpacing private equity in key regions. The report also notes that institutional allocators are increasingly viewing private credit as a standalone asset class, distinct from both fixed income and private equity.
It’s a sign, Piccolo notes, that investors are growing more deliberate in how they approach illiquid assets—aligning strategy not just with returns, but with time horizons and risk tolerance.
Relationship capital will matter more
As the private markets universe expands, so do expectations around what private banks should deliver. Scale, access, and structuring expertise remain essential—but they’re no longer enough to set one institution apart.
“The personal element will keep being something relevant, particularly for less liquid investments,” Piccolo says. “But that alone won’t be enough.”
What will matter more, he believes, is a bank’s ability to build long-term relationships—with both clients and managers—and to offer timely insight ahead of market shifts, not just in reaction to them.
“Clients will count more and more on the ability to partner with reliable and talented managers, and on the skill of anticipating industry trends rather than just riding momentum,” he says. “That value becomes especially clear in moments of market stress—when guidance and clarity matter most.”
Staying grounded when markets move
Reflecting on the volatility of recent years, Piccolo returns to a principle that has shaped his team’s approach across cycles: consistency. While market sentiment and structures evolve, he believes the core pillars of portfolio construction remain the same.
“We have relentlessly focused on the critically important factors in portfolio construction,” he says. “A well-thought strategic asset allocation, appropriate FX diversification, systematic dynamic hedging of market views, and an allocation to private markets in line with each client’s expected level of risk.” The goal, he adds, is to help clients stay grounded and focused—regardless of market noise.
“We keep insisting with clients to dedicate time to those factors that influence portfolio returns the most in the medium to long term.”
As private credit matures, Piccolo sees opportunity for investors who look past the headlines—and partner with institutions that prioritise preparation, patience, and long-term value.
