Arrow announces raises €838m for inaugural pan-European NPL fund

Arrow Global Group has announced has raised €838 million for inaugural pan-European NPL (Non-Performing Loans) fund.

Arrow says raising the Fund is a major achievement in the development of the company’s fund management capabilities and is central to the Group’s strategy to accelerate towards a more capital-light model.

Lee Rochford, Group Chief Executive Officer of Arrow Global said “This first successful fundraising is transformational for the Group. It shows we are successfully executing our strategy to transform the business through the build-out of our fund management capabilities.  This represents the completion of a significant initial stage of this strategy and part of our continued drive to engage with capital partners and grow our assets under management.  I have been impressed with the speed of execution of this fundraising, driven by strong demand from institutional investors and the fantastic efforts of the Arrow Global team.”

“Fund management businesses are high-margin and capital-light, delivering strong recurring revenues.  Growing our fund management business will allow us to accelerate the achievement of our five-year targets while also providing our investors with access to a specialist and highly attractive asset class through our leading pan-European platform.”

“Furthermore, managing a significant pool of third-party capital will grow capital-light revenue in our asset management and servicing businesses through the offering of AMS services to the Fund.  When combined with the long weighted average duration of our debt, the raising of third-party funds will have a positive impact on our future funding model.”

“We are excited by the fund management business’s potential to transform the quantum and sustainability of our earnings and, as the business evolves further, we expect to provide further guidance on its implications for Arrow Group’s five-year targets. At this stage, the market’s medium-term expectations for the Group’s profitability remain appropriate. In 2020, the financial impact of the Fund on the Group’s profit will be immaterial.”

Zach Lewy, Founder and Chief Investment Officer, said “We look forward to working with our Limited Partners to make this fund – and future funds – a great success.  This fund raise has brought a diverse range of new clients to the Arrow Global Group and we are excited about the opportunity we have to unlock value for this important new client base in our specialist, high return asset classes.”