Investment strategies
Vertically integrated asset management
Arrow’s investment team have an 18-year plus track record of successfully investing in European credit and real estate.
Arrow’s investment team have an 18-year plus track record of successfully investing in European credit and real estate.
Our unique business model combines two complementary arms: fund management and local asset management.
Arrow has invested more than €8 billion over the last 18 years across over a thousand investments in a broad range of European credit and real estate opportunities, achieving an 18% gross IRR with consistent performance and attractive diversification.
Arrow’s pan-European asset management and servicing platforms service a significant portion of the assets for both Arrow and its fund and investment management business, as well as for third-party clients such as other investment managers and banks. We have €70 billion of Assets Under Management of which €14 billion is related to real estate assets.
Our best in-class local servicing capabilities enable a unique granular ability to access new investments only available with local presence and knowledge, enabling us to grow our fund management operations.
- Highly diversified investors enables good capital flow
- Multi-asset class opportunities from local expertise
- Multi-market exposure delivers diversification
management
- 19 platforms across 5 countries delivers diversification
- Deep local knowledge delivers better asset management performance
- Strong local relationships delivers better, often off-market, deals
The differentiated Arrow model: local operator-investor business
Competitive advantage
19 local platforms in five countries employing 2,000 specialists
Local origination capability and assets under management as the source for investment opportunities.
Ability to unlock large volume of opportunities in the complex, fragmented and heterogeneous European market.
- Local leading asset management platforms: supporting a central investment team
- Unique market access: off-market opportunities
- Deep local presence: best in class local asset management, track-record, market knowledge and expertise, strong local relationships
Local servicing platforms
Arrow Global’s operating model is well positioned to pursue different investment strategies across the capital structure
- Unique market access
- 80%+ investments originated off-market
- Buying 1 of every 300 assets we service
- Average investment deal size €12m
- Local originators and deal flow
- Local assets and debt collection data
- Regulated, rated & licensed
- Local underwriting and expertise
- Local relationships
- +€14 billion real estate AuM
- 9 real estate focused platforms in Arrow’s 5 target countries (UK, Ireland, Netherlands, Italy and Portugal)
- Sourcing high quality assets from complex and distressed situations
- €9 billion servicing AuM by lending platforms
- 4 lending platforms: UK, Ireland, NL
- Expanding to cover Arrow’s 5 target markets, leveraging the pan-European lending fund being raised
- €4.5 billion of discretionary third-party capital
- ACO I closed in 2020, over €1.7bn invested at a running 18% unlevered deal IRR (@ June 23)
- ACO II: €2.75 billion closed in March 2023
- Investments across Arrow’s 5 target countries, multiple asset classes
Local servicing capabilities
Our best in-class local servicing capabilities enable a unique granular ability to access new investments only available with local presence and knowledge, enabling us to grow our fund management operations.
Real Estate
The investment strategy of Arrow’s Real Estate Opportunities Fund is identifying and exploiting local market inefficiencies and dislocations, with a focus on value-added and opportunistic investments in direct real estate.
Arrow employs a deep fundamental, analytical and underwriting process and utilises its extensive industry relationships and expertise to identify attractive investments and create value in real estate assets including developed and undeveloped real estate. Arrow’s long and successful track record investing in real estate-related debt strategies, including non-performing loans, bank REO portfolios and specialty lending, along with the extensive capabilities of the Sourcing & Servicing Platforms, provides Arrow with the expertise to identify and capture value in real estate markets.
Our flexible investment approach in real estate capitalises on a wide range of investment opportunities, adapts to changing market conditions, and creates value through both traditional and alternative real estate investments. Our adaptability allows us to capitalise on dislocation and current European Real Estate market trends, such as the systemic undersupply of housing stock, energy transition, and the increasing role of private capital in real estate development
Our Real Estate investment strategy focuses primarily on financially distressed real estate in major cities in Portugal, the U.K., Ireland, Italy and the Netherlands. Asset selection sees us acquire high-quality real estate or real estate related assets at discounts to replacement costs or intrinsic value and/or high yields on cost, with clear turnaround or value-add strategies.
Arrow has a long track record in pursuing, completing and exiting real estate transactions across our targets markets, and will typically involve a combination or operational improvements, cost savings, and strategic initiatives.
Proven track record
Our impressive track record showcases our deep understanding of local markets, and in particular how we are able to secure investment exposure to high quality real estate collateral even in challenging market conditions.
Opportunistic Credit and Direct Lending
Arrow’s Credit Opportunities Fund specialises in using our integrated asset management approach to unlock value from various real estate-backed credit investments.
We focus on high-quality assets that offer opportunities in operational improvement potential and where we can utilise our local platform expertise during origination, management, and disposal.
Our extensive network of 19 local platforms, with €70bn in third-party assets under management, distinguishes Arrow through our exclusive access to distinctive off-market investment opportunities in today’s unpredictable macroeconomic environment. Our long-term commitment to local teams and communities emphasises Arrow’s role as a preferred partner for many core banks and other local sellers in our 5 geographies. This approach drives the high volume of off-market transactions we engage in, helping us uncover hidden opportunities in the diverse and fragmented European market.
After acquiring investments, Arrow’s robust credit franchise utilises our c. 2,000 employees to create value through comprehensive asset management strategies. These include resolving investment complexities, developing or repositioning assets, executing targeted disposal approaches, and optimising project costs. Our centralised team works closely with Arrow’s local platforms to conduct thorough due diligence and underwriting processes for all our investments – leverage our deep local asset expertise. Our underwriting process emphasises detailed operational risk mitigation while identifying opportunities for future optimisation, allowing us to find appealing investments that perform well in various macroeconomic conditions.
Arrow’s direct lending expertise spans our platforms, particularly in originating, underwriting, and servicing development and bridging loans across various residential-focused sectors in our five regions. We strive for superior risk-adjusted returns with low volatility and strong ESG credentials while safeguarding investor capital. Our meticulous deal selection and stringent risk management have resulted in a flawless record since our lending platforms’ inception in 2009. With dedicated lending teams knowledgeable in each real estate asset class, we confidently support our borrowers throughout their projects, regardless of complexity.
Flexible investment
Our flexible investment approach in real estate capitalises on a wide range of investment opportunities, adapts to changing market conditions, and creates value through both traditional and alternative real estate investments. Our adaptability allows us to capitalise on dislocation and current European Real Estate market trends, such as the systemic undersupply of housing stock, energy transition, and the increasing role of private capital in real estate development.
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“Arrow is a vertically integrated asset manager who owns its own servicing platforms in both the credit and real estate space” Zach Lewy, CEO, CIO, Arrow Global