Arrow Global has raised over 1.1 billion euros for its debut European credit fund. The target is 2 billion euros. Eaton Partners is the placement agent while Skadden Arps is providing legal counsel.
Arrow Global Group plc (“Arrow Global”, and together with its subsidiaries the “Group”), a leading European investor and asset manager in secured and unsecured defaulted and non-core loan portfolios and real estate, is pleased to announce that Arrow Credit Opportunities SCSp and related entities, the “Fund”, has raised over €1.1 billion in its inaugural fund raise. The fund is targeting €2 billion of AUM before the end of 2020.
The fund raise has drawn interest from some of the largest and most sophisticated global investors from diverse geographies and sectors. Arrow Global has committed to invest capital amounting to 24.9% of the total commitments to the Fund as a co-investor, up to €500 million.
The Fund will invest in select European credit opportunities sourced through the Arrow Global investment management business, leveraging the pan-European expertise of the Group to offer investors access to both specialist and high-returning asset classes across its focus countries of Italy, Portugal, UK, Ireland and the Netherlands. Arrow is unique as both a local servicer and investor of non-core portfolios, with robust in-house operating platforms and in-country investment professionals supporting an experienced, central investment team for the Fund.
The Group is particularly excited about current and prospective market opportunities driven by strong regulatory tailwinds. With the ongoing transformational restructuring of banks’ balance sheets, over €2.1 trillion of assets need to be sold by European banks to meet capital ratios, cost-income ratios and returns on capital.
Deleveraging, which helps banks increase in Risk Weighted Capital and capital buffers, will continue to drive a wave of assets from banks that need good local management. The Fund is also well-positioned to invest in the increasing wave of secondary deal flow given its access to the Arrow platform and its unique position in the centre of the European credit market.
Commenting, Lee Rochford, Group Chief Executive Officer of Arrow Global Group, said: “This first successful fund raising 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 and represents 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 fund raising, driven by strong demand from institutional investors.”
Zach Lewy, Chief Investment Officer and Founder of Arrow Global Group, added: “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.”
AGG Capital Management Limited (“AGG Capital Management”), a Jersey-incorporated and wholly-owned subsidiary of Arrow Global, will serve as portfolio manager to the Fund.
Eaton Partners, a Stifel Company, is acting as the exclusive global placement agent for the Fund. Skadden Arps is providing legal counsel.
About Arrow Global
Established in 2005, Arrow Global specialises in the purchase, collection and servicing of non-performing and non-core assets. We identify, acquire and manage secured and unsecured loan and real estate portfolios from and on behalf of financial institutions, such as banks, institutional fund investors and specialist lenders.