UK-based private credit firm Arrow Global has launched a real estate platform in the Netherlands – Mica Real Estate – to manage its property credit and equity exposure in the country.
Speaking to Real Estate Capital Europe, John Calvao, managing principal at Arrow, said Mica Real Estate will offer local expertise for further investment into both commercial and residential assets in the Dutch market. It will support Arrow by providing asset management and deal sourcing in the country.
Arrow’s exposure in the Netherlands currently comes from two entities it owns in the country, Dutch non-bank lender RNHB – which focuses on buy-to-let and commercial real estate – and credit servicing company Vesting Finance, which acts as the lead servicer for RNHB.
“We see a strong opportunity across the [Dutch] residential sector where there is a structural undersupply of living assets,” Calvao said.
The Dutch real estate market has seen record low investments this year amid hiking inflation rates. However, property consultant CBRE, in its mid-year outlook on the Netherlands, released in July, said there are now signs of recovery in the market.
Investment volumes increased during the second quarter of the year to €1.8 billion, compared to the first quarter volumes of €1.4 billion. CBRE said the improvement was the ‘first confirmation’ that investors are finding the current market conditions attractive enough to re-engage in buying assets – and sellers are also willing to sell at the revised prices.
The Amsterdam-based Mica Real Estate team will be led by Mark Debets, former director at Hudson Advisors, a subsidiary of Dallas manager Lone Star Funds, and Timo van den Noort, formerly vice-president at New York private equity firm Fortress Investment Group.
Arrow opted to launch a real estate firm instead of acquiring a platform in the country, as it did with London-based residential development lender Maslow Capital, which it fully acquired last month, because Debets and Noort have significant experience in the real estate and credit asset management business.
Calvao explained: “The Mica team has a proven track-record in building platforms in direct real estate as well as managing credit opportunities. Mica is an addition to the credit specialists already in the existing European Arrow platform.”
Arrow, which operates €70 billion assets under management – €14 billion related to real estate, will invest through its Arrow Credit Opportunities II fund and the newly launched Arrow Real Estate Opportunities fund, he said, adding Arrow is also open to co-investing in the country.
The firm held a first close for AREO in the first quarter of 2023 raising €100 million – or €110 million including Arrow’s co-investment – and invests in high quality real estate from complex and distressed situations in Europe.
Meanwhile, it closed ACO II on €2.75 billion – a hard-cap, in March and with this fund the firm invests in a range of asset-backed credit opportunities, including in the real estate sector.
It expects 90 percent of the ACO II portfolio to be secured by real estate, cash in court, or other mixed securities. Through these funds, Arrow will focus on its core European markets – UK, Italy, Portugal, Ireland and the Netherlands.
Arrow reported in August that the geographic asset allocation of ACO I – which closed in 2020 on €1.9 billion – ACO II and AREO heavily favour the UK and Portugal, with these markets accounting for a 37 percent and 32 percent share, respectively. While the Netherlands only accounts for three percent.
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