Direct Lending

Arcmont’s established Direct Lending strategy provides lending solutions to European mid to upper-mid-sized companies focusing on non-cyclical, defensive sectors.

The strategy aims to originate and underwrite a diversified portfolio of bespoke senior and subordinated loans.

LATEST Fund Vintages & Associated Vehicles – Investible Capital

  • Direct Lending IV – €10bn
  • Direct Lending III – €5.7bn 
  • Direct Lending II – €2.7bn

Highlights

  • Rigorous underwriting and portfolio monitoring
  • Proprietary origination through local presence
  • Robust performance through long established investment process
  • Highly diversified portfolio construction

Key contacts

Mattis Poetter
Partner & CIO
Michael Massarano
Partner & Deputy CIO
Arnaud Piens
Partner, Head of France
Fred Nada
Partner
Karthi Mowdhgalya
Partner & Chief Commercial Officer
Marc Spangenberg
Partner
Marcus Maier-Krug
Partner & Co-Head of Portfolio Management
Patrick Schreiber
Partner
Vincent Vitores
Partner & Co-Head of Portfolio Management
Vanni Mario Zanchi
Partner, Head of Italy

Attractive market opportunity

Demand for Direct Lending has grown significantly in recent years, as sponsors increasingly recognise the benefits it offers: speed of transaction, certainty around terms and pricing, flexibility to create bespoke financing structures.

European Direct Lending offers investors several distinct benefits:

  • Attractive risk-adjusted total potential returns
  • Attractive income and cash yield
  • Natural inflation hedge
  • Low volatility
  • Portfolio diversification

Investment Profile

Arcmont’s highly selective, cycle-tested investment process is focused on targeting:

Established firms

  • Supporting M&A, LBO and Refinancing activity
  • Focus on sponsor backed middle and upper-middle market businesses

Defensive Portfolio

  • Focusing on non-cyclical sectors
  • Targeting growing businesses with strong cashflows

European Credit

  • Investing primarily in Northern/Western Europe
  • Pan-European origination benefitting from local networks
  1. Past performance is not indicative of future results. Source: Arcmont. Comparison of Arcmont’s cumulative returns across Direct Lending Strategy investments against the S&P LCD ELLI and Bloomberg Pan-European High-Yield Total Return indices since 2011.
  2. Statement on volatility is in reference to relative volatility of the Cliffwater Direct Lending index relative to comparable High-Yield and Leveraged Loan market indices.
  3. Diversification is a technique to help reduce risk. It is not guaranteed to protect against loss. 15-years annualised correlation of the Cliffwater Direct Lending Index to the S&P/LSTA Leveraged Loan Index. Data as of Q1 2024.

Unlocking Arcmont strategies through:

European Direct Lending opportunities with mandated investment and harvesting periods – Arcmont’s most recent vintage fund raised €10bn investible capital.

Highly bespoke solutions tailored to the investment requirements of individual scale investors.

  1. Past Performance: Past results discussed in this document are not necessarily comparable to, indicative of, or a guarantee of future results, including the future results of any investment or any Fund, including ECAP. No representation is being made that any investment or any Fund, including ECAP, has, will, or is likely to achieve results similar to those discussed herein or that significant losses will be avoided. It should not be assumed that the investment decisions Arcmont makes in the future will be profitable or will equal the investment performance set forth herein with respect to any of the Funds, including ECAP, or any underlying investment made by any of the Funds, including ECAP. Investments in Funds managed or advised by Arcmont may lose value. Investment results will fluctuate. Certain market and economic events having a positive impact on performance may not repeat themselves. Past results may be based on unaudited, preliminary information and are subject to change.

Perpetual exposure to European Direct Lending opportunities to enable commitment and redemption flexibility for investors.

Exposure to European Direct Lending opportunities with moderate use of leverage, alongside an element of liquidity for investors, including through an LTAF.

  1. Past Performance: Past results discussed in this document are not necessarily comparable to, indicative of, or a guarantee of future results, including the future results of any investment or any Fund, including ECAP. No representation is being made that any investment or any Fund, including ECAP, has, will, or is likely to achieve results similar to those discussed herein or that significant losses will be avoided. It should not be assumed that the investment decisions Arcmont makes in the future will be profitable or will equal the investment performance set forth herein with respect to any of the Funds, including ECAP, or any underlying investment made by any of the Funds, including ECAP. Investments in Funds managed or advised by Arcmont may lose value. Investment results will fluctuate. Certain market and economic events having a positive impact on performance may not repeat themselves. Past results may be based on unaudited, preliminary information and are subject to change.

Our solutions

Strategic thinking that cuts through complex challenges.