Germany should move its trillions of euros in savings out of banks and put them to work for its Mittelstand through private markets. That was the message from Philipp Hildebrand, vice chairman of Blackrock’s Global Executive Committee, on Thursday during the presentation of a report on the European private markets sector.
Preqin, a research firm owned by the asset manager, predicts that the market for alternative investments will grow from just under 3,000 billion euro to 5,000 billion euro in assets under management by 2030. Although still modest compared to the size of the US market, Preqin expects Europe to grow relatively faster in the coming years. Investors see opportunities here, as European assets are more attractively valued and governments are planning major investments to boost economic growth.
Hildebrand pointed out that Europe’s gross domestic product was still comparable to that of the United States at the start of this century but has since fallen behind by about 30 percent. “That gradual deterioration happened year after year, especially in Germany, but people didn’t really want to face it,” he said. “There was no concern because of the country’s leading positions in chemicals and the automotive sector. Even as recently as 2022, during a board meeting in Bavaria, you could still hear complacent remarks like ‘We’re doing fine,’ ‘We’re the best,’ and ‘Everything will be okay.’”
Hildebrand takes hope from the fact that the sense of urgency has become clear and that Mario Draghi, in his report for the European Commission, pinpointed the structural weaknesses. “First comes recognition, then the shock, and then hopefully the third step is that an answer follows. Implementation is the next challenge, and that’s difficult in a coalition government like Germany’s. But the diagnosis is there. Draghi was very clear about that.”
According to Hildebrand, the problem isn’t a lack of money, but the fact that it is lying dormant in Europe’s bank vaults. “The good news is that there are ten trillion euro sitting in European savings accounts,” he said.
To join the global investment wave in artificial intelligence—which is estimated to amount to between 1,500 and 2,500 billion dollar annually—Hildebrand said it is “essential” to find ways to mobilize European savings. He called the completion of the capital markets union “an existential challenge” for Europe.
Companies mainly accessible through private markets
Alternative markets such as private equity, private credit, infrastructure, real estate, and hedge funds must play a key role in that process, argued Dirk Schmitz, Blackrock’s country head for Germany, Austria, and Eastern Europe. “Of the companies with more than 100 million euro in revenue, only 15 percent are listed on a stock exchange. Investors can only access the rest through private markets,” he said. According to Blackrock, the German Mittelstand in particular relies on private credit, as banks are increasingly retreating from corporate lending.
According to Preqin, fund managers had invested 216.6 billion euro in German assets as of the end of December. Disclosed private capital deals in the first half of 2025 amounted to 21.5 billion euro, including 2.6 billion euro in infrastructure projects. In the first half of 2024, total deal value reached 27.8 billion euro. Capital raised in the first six months of 2025 totaled 4.7 billion euro across 32 funds, compared to 12.7 billion euro across 70 funds for all of 2024.
Infrastructure
The strongest growth within Europe’s alternative markets in the coming years is expected in infrastructure, according to Preqin’s report, which forecasts a compound annual growth rate (CAGR) of 14.8 percent through 2030. “The key challenges facing Germany and Europe can only be financed through private market transactions. That includes financing for infrastructure, roads, renewable energy, as well as innovation and start-ups,” Schmitz said.
Blackrock, the former employer of current chancellor Friedrich Merz, has recently made major investments in the lucrative private markets segment for asset managers through acquisitions, partnerships, and new products. In his April newsletter, founder Larry Fink urged investors to abandon the traditional portfolio mix of 60 percent equities and 40 percent bonds in favor of 50 percent equities, 30 percent bonds, and 20 percent private assets.