Arrow Global shares have risen this morning after the debt recovery specialist announced it had raised €838m (£712m) for its first fund.
Of the total capital commitments for the eight-year closed end fund, €628.5m was raised from third party investors.
The fund is targeting a total €2bn assets under management by the end of 2020. Arrow itself will invest either 24.9 per cent of the final fund or €500m as a co-investor.
The fund will invest in “selective European credit opportunities” sourced via its investment management business, Arrow said.
“This first successful fund raising is transformational for the group,” said chief executive officer Lee Rochford.
“It shows we are successfully executing our strategy to transform the business through the build-out of our fund management capabilities.”
Arrow Global’s shares rose as much as 6.14 per cent following the news.
The Manchester-based company is in the process of shifting to a more capital-light model, with the fund generating new revenue streams from management and performance fees payable to Arrow.
“Growing our fund management business will allow us to accelerate the achievement of our five-year targets while also providing our investors with access to a specialist and highly attractive asset class through our leading pan-European platform,” said Rochford.
Rochford added that the market’s medium-term profit expectations for Arrow “remain appropriate”, and the fund’s financial impact on the group’s profit in 2020 would be “immaterial”.
“This fund raise has brought a diverse range of new clients to the Arrow Global group and we are excited about the opportunity we have to unlock value for this important new client base in our specialist, high return asset classes,” said founder and chief investment officer Zach Lewy.