Investment proposition

Smart thinking, intelligent execution

Arrow’s strong market positioning, balance sheet and access to multiple sources of capital means it can take advantage of opportunities to achieve strong, sustainable returns while also generating recurring, capital light revenue streams.

1. Sophisticated investment platform in a growth market

• Focus on high value niches
• Unique origination channels
• Ability to invest above replacement rate at a minimum of mid-teen net IRRs

2. Increasing quality of earnings

• Flexible model depending on credit cycle: capital intensive Investment Business and capital-light Asset Management and Servicing Business
• Capital-light Asset Management and Servicing Business fastest growing part of the business
• Target to double AMS Business income and increase it to 50% of gross total Group income over five years

3. Consistently strong returns for shareholders

• Strong through-the-cycle underlying ROE target of 25%
• Sustainable dividend policy with a payout ratio of at least 35% of underlying profit after tax combined with reducing leverage

4. Resilient balance sheet

• Long duration debt – first funding maturity not due until 2024
• Low weighted average cost of debt – reduced to 3.9% from over 8%
• New lower leverage ratio of 3.0x-3.5x secured net debt to adjusted EBITDA
• Focus on prudent portfolio investing

5. Reliable through-the cycle performance

• Balance sheet discipline
• Prudent approach to underwriting
• Sustainable returns for shareholders