Arrow Global pivots to fund management model

Arrow Global CEO Lee Rochford

Manchester-based European debt management firm Arrow Global Group said on Thursday its 2019 profit before tax increased 28.3% to £51.3 million as it pivoted its business model “to a more capital light alternative asset management model.”

Arrow said its fund management business launched during the year with €838.0 million in initial funds under management (FUM) and it will continue to target €2 billion of FUM by the end of 2020.

However, Arrow’s 2019 performance failed to meet some analysts’ expectations and its shares fell 13% amid the wider market meltdown.

Underlying profit before tax fell 5.2% to £78.1 million, primarily driven by lower impairment gains.

Core cash collections rose 7.5% to £442.3 million.

Arrow Global Group CEO Lee Rochford said in a statement: “The business performed well against its key operating metrics in 2019, with returns in the investment business remaining strong and improving margins in our asset management and servicing business leading to a 28.3% increase in profit before tax to £51.3 million. 

“This helped increase free cashflow generation by 13.3% to £261.4 million, allowing us to increase the dividend for the seventh year in a row and finish 2019 within our new lower leverage range of 3.0x-3.5x.

“We are excited by Arrow’s future prospects and continue to see enormous opportunity to generate strong returns in our chosen markets. 

“The launch of our fund management business is transformational for the group, allowing us to capture more of this opportunity while also growing our capital light earnings. 

“Our initial fundraise of €838.0 million was a milestone in our evolution to become a fully integrated alternative asset manager. 

“We believe we can scale this business significantly over time and are continuing to target total funds under management (FUM) of €2.0 billion by the end of 2020.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.