European mid-market businesses suited for Arrow's customized platform approach
**Arrow Global's Vertically Integrated Model Taps Into European Private Credit Opportunities**
In the dynamic landscape of European mid-market real estate and private credit, Arrow Global stands out with its unique, vertically integrated business model. The company specialises in small, non-core, or distressed assets that often evade the attention of large institutions.
This strategy is underpinned by a network of local platforms across eight countries, each providing real-time intelligence, privileged deal flow, and deep market knowledge. Arrow Global Massey in the UK, Zenith in Italy, Galata in Spain, and other platforms play strategic roles in origination, underwriting, servicing, and asset management.
One of the key advantages of Arrow's model is its local presence and operational control. By acquiring and integrating local platforms, such as Interboden in Germany, the company gains visibility into specific markets and the ability to execute decisions quickly. This comprehensive approach, which includes land acquisition, project management, and sales, de-risks deployments and accelerates time to market.
Arrow's end-to-end capabilities also enhance its position as a key origination partner for institutional capital. The company's regulatory licenses across Europe allow it to operate effectively in different jurisdictions, capitalising on nuanced local opportunities that might be missed by larger, more generalised players.
Risk management and alpha generation are at the heart of Arrow's strategy. The company's local platforms provide a granular understanding of market conditions, enabling the identification of misaligned capital structures and the development of strategies to resolve these inefficiencies. This expertise helps in managing risk and generating alpha through precise execution and asset management.
Arrow Global's approach aligns with the structural tailwinds driving demand for private credit, offering strong, risk-adjusted returns, downside protection, predictability of outcomes, regular interest payments, and the ability to match portfolios to long-term objectives. The company's underwriting process includes using real performance data from servicing operations, covering over 35 million loans and assets across their portfolio.
In 2024, Arrow Global invested €2.1bn and achieved €1.2bn in realisations. The company's platform is positioned at scale with €11bn in Funds Under Management (FUM) and €112bn total Assets Under Management (AUM), both growing. Arrow manages various specialized platforms like master and special servicers, a credit bureau, a securitisation vehicle, legal processes, and real estate and hospitality assets, which are essential parts of their ability to price risk accurately, manage complexity, and execute business plans with precision.
The company's local platforms are integrated through long-term partnerships and joint ventures, ensuring cultural alignment, continuity, and trust. Arrow Global's approach to private credit continues to offer diversity of strategies across the risk spectrum and the agility enabled by shorter fund durations. As private credit emerges not just as a complement to private equity, but as a cornerstone allocation, Arrow Global is well-positioned to capitalise on the opportunities this trend presents.
- In the realm of European business, Arrow Global's unique, vertically integrated model extends to real-estate investments, where local platforms in various countries provide privileged deal flow and deep market knowledge.
- Recognizing the potential for alpha generation, Arrow Global's strategic business model in private credit also includes investments in select real-estate assets, leveraging local presence for asset management and risk management, enhancing overall business prospects.
