Debt purchaser Arrow Global has announced a partnership with Oaktree Capital Management, a US investment firm with more than $99bn in assets under management, to buy portfolios of UK residential mortgages.
Bringing Oaktree on board would “provide significant portfolio investment”, Arrow said.
The news coincided with a second announcement that Arrow will acquire the UK and Ireland branch of Mars Capital, an affiliate of Oaktree which buys mortgages from other lending institutions, for £15.5m.
“These agreements expand our European footprint, augment our capital-light asset management capabilities, provide further impetus to our profitable growth trajectory and are completely aligned with our strategic direction,” said Arrow's chief executive Lee Rochford.
The partnership with Oaktree, which specialises in investing in troubled companies through distressed debt or private equity strategies, did not appear to be a sign that Arrow would be bought out by the firm.
“There have been no approaches [for Arrow] in the time that I have been CEO,” Rochford told Reuters, although he added that he had seen a lot of speculative private equity enquiries for UK companies post-Brexit.
Arrow also revealed its first-half results today, which showed portfolio purchases were up 30.3 per cent to £125.1m and revenue had rocketed by 47.6 per cent to £149.8m since the same period last year.
As well as buying mortgage portfolios in the UK, the business purchases non-performing loans from institutions around Europe as banking reforms are forcing them to offload the bad debt.
“We now address over €1 trillion of market opportunity, with leading platforms, and are investing to ensure Arrow Global has leading capabilities in the industry,” said Rochford.