How Deutsche Bank Private Bank partnered with a long‑established family office to strengthen portfolio resilience, navigate rising geopolitical uncertainty, and stay confidently invested through turbulent markets.
Deutsche Bank’s Private Bank recently supported a long‑established family office in addressing a growing concern: how to remain confidently invested during times of escalating geopolitical uncertainty, but also transformative upside opportunity.
The family, already familiar with Deutsche Bank Private Bank’s discretionary management capabilities, was seeking a more robust way to safeguard its long‑term investment strategy without compromising on future growth potential.
Recognising the complexity of the challenge, we brought together a team consisting of regional leadership, risk management, and Discretionary Portfolio Management (DPM) in Switzerland.
Through close collaboration, the teams developed a tailored approach designed to strengthen the client’s portfolio resilience, maintain strategic risk discipline, and reinforce the family office’s ability to stay invested with their desired equity allocation throughout periods of heightened market uncertainty.
This partnership not only provided the family office with a clearer path through turbulent markets, but also showcased how Deutsche Bank’s quantitative, systematic and economically efficient investment solutions can address the needs of sophisticated investors facing uncertain macroeconomic conditions.
The challenge
The family office had long pursued a disciplined, long‑term investment strategy with Deutsche Bank Private Bank. However, rising geopolitical tensions and sharp market swings raised concerns about how to balance the desire for increased equity participation with the need to constrain portfolio risk. The client was interested in increasing their exposure to long‑term growth opportunities but did not wish to go beyond their established risk tolerance.
What they needed was an investment approach that would allow for meaningful additional upside participation while offering protection against strong market downturns – ensuring they could stay invested through periods of turbulence.
The solution
Deutsche Bank proposed applying a protective overlay strategy to a substantial portion of the client’s assets. This disciplined, systematic approach, based on quantitative analysis of empirical market behaviour, enables clients to increase their equity allocation – typically by approximately 20-30% – without significantly raising overall portfolio risk in the context of extreme market losses.
The approach involves allocating a small proportion of the portfolio to a systematic, economically efficient downside protection strategy which is based on quantitative analysis of empirical market price data. This hedge acts as a portfolio “airbag,” designed to mitigate portfolio losses from heavy market downturns, while at the same time enabling the investor to endure more volatility. As a result, the overlay gives clients the ability to participate more confidently in long‑term equity market developments while remaining aligned with their chosen risk capacity.
Working collaboratively across regions, the teams developed a customised implementation for the family office.
Disciplined risk management
The decision proved timely. Shortly after implementation, global market conditions became significantly more volatile. Thanks to the built‑in protection of the chosen overlay strategy, the client’s portfolio remained resilient and continued to perform in line with expectations – avoiding the need to reduce risk unnecessarily during the turbulence.
What might otherwise have been a challenge instead highlighted the value of disciplined risk management and a long‑term investment approach. The successful outcome strengthened client confidence, deepened the relationship, and underscored Deutsche Bank’s ability to deliver tailored, systematic investment solutions that may help clients navigate complex market environments.
