How assets can provide security

Featured in Private Debt Investor, Arrow’s Founder and CEO, Zach Lewy, examines why asset-backed lending continues to demonstrate resilience within private credit, supported by disciplined underwriting, robust documentation and falling interest rates in Europe.

Private credit is a broad and differentiated market, with markedly different risk characteristics across corporate and asset-backed strategies. Asset-backed lending benefits from clearer collateral structures, lower attachment points and more stable lender protections, particularly where conservative loan to value ratios and liquid assets underpin portfolio construction.

European asset-backed markets continue to show solid momentum, supported by steady transactional activity in residential and real assets, in contrast to the more cyclical dynamics affecting corporate lending and public market exits. Lewy notes that Eurozone interest rates are generally trending downwards, contributing to a more supportive environment for borrowers.

Sustained performance in asset-backed strategies depends on deep local knowledge, proximity to assets and the infrastructure required to originate, underwrite and manage exposures at scale. Disciplined asset selection, sponsor quality and repeat partnerships remain central to preserving underwriting standards as private credit continues to expand.

“I believe this is a great market for firms like ours. When you combine local knowledge, the appropriate regulatory permissions and high quality data sets, those capabilities can become a powerful and enduring source of competitive advantage.”

Read the full article here.