Five Arrows
The alternative assets arm of the Rothschild & Co Group
Founded in 2009, Five Arrows manages a series of funds primarily dedicated to corporate and secondaries private equity, as well as broadly syndicated loans and direct lending. We focus on both Europe and North America, with a team of more than 280 people working across six offices – Paris, London, Luxembourg, New York, Los Angeles and San Francisco.
New Court, location of the Rothschild's UK headquarters since and currently in its fourth generation of building
Investment approach
Our investment approach centres on identifying companies with highly defensible market positions; business models with high visibility of organic unit volume growth and strong free cash flow conversion; strong management teams; and multiple operational levers to unlock latent value.
Given the Five Arrows investment approach, experience has shown that the sectors most relevant to us are healthcare, education, data & software, and tech-enabled business services.
The level of specialisation is highest for our Corporate Private Equity business, and the level of diversification is highest for our Credit Management business – due to the nature of its mandate and structure.
The Rothschild family’s long investing tradition has shaped the Five Arrows approach to investing. Three intertwined principles define who we are today: a deeply ingrained passion for investing, equal emphasis on risk and return, and a culture of partnership.
Strategies
Corporate Private Equity
Established in 2009, our Corporate Private Equity business today manages €10.3 billion, with a team of 94 investment professionals investing in a series of funds focused on growth and buyout deals in the European and North American mid-market.
Multi-Strategies
Our Multi-Strategies business manages €5.9 billion, with a team of 38 investment professionals focused on general partner-led secondaries, private equity funds of funds, co-investments, and minority direct growth and buyout investments focused on sustainability.
Direct Lending
Our Direct Lending business manages €3.0 billion, with a team of 17 investment professionals. We provide customised senior and subordinated debt financing solutions to privately-owned businesses across the European and North American mid-market.
Credit Management
Rothschild & Co’s history in liquid credit dates back more than two decades. Today we manage €9.0 billion, with a team of 31 investment professionals managing secured, sub-investment grade credit across a range of European and North American funds and investment mandates in well-diversified portfolios.
> To learn more about Five Arrows, visit our website
Key numbers
€,bn
AuM
€,bn
raised in
€m
total revenue in
+
people
offices
€,bn
raised*
€,bn
invested*
€,bn
distributed*
*Since Five Arrows inception in 2009
Five Arrows— highlights of
Five Arrows Assets under Management (AuM) reached €28.2 billion at the end of , up % over December .
We delivered this increase primarily by securing €3.7 billion of new capital, across all strategies. Our net recurring revenue reached €202 million, up 5% vs 2023, which was already a record year. Performance revenue increased 37% compared to 2023, driven by valuation uplifts achieved through successful exits and unrealised valuation gains on the private equity and secondaries portfolios.
Continued focus on sustainable investing
Five Arrows is committed to maximising long-term value creation for our stakeholders by acting as a responsible investor and promoting sustainability. This commitment is reflected in a sustainability roadmap that applies to all our investment strategies.
We have created a framework aimed at helping our teams manage sustainability-related risk within our investments, giving consideration of these risks both in the investment decision-making process and, when possible, portfolio management. We are deploying new proprietary ESG tools to assist us to assess sustainability-related risks during the due diligence phase. To further incentivise the Five Arrows teams to prioritise responsible investment considerations, sustainability criteria were included when determining employee compensation. When possible, Five Arrows adopts an active approach to responsible investing by engaging with our portfolio companies and fund managers where we believe we can influence their sustainability practices. This involves close collaboration through ongoing dialogue, group discussions, and one-on-one meetings to help them advance their own sustainability programmes.
During 2024, Five Arrows launched two new Sustainable Finance Disclosure Regulation Article 8 products, Five Arrows Growth Partners II (lower mid-market corporate private equity fund) and Five Arrows Single Assets IV (focused on single asset continuation vehicles and co-investments). Both aim to promote environmental and social characteristics, along with good governance practices. Additionally, we were pleased that our climate-related targets were officially validated by the Science Based Targets initiative (SBTi). The goal is to achieve a 50% absolute reduction in Scope 1 and Scope 2 greenhouse gas emissions from 2023 to 2030. Additionally, we have committed to have 39% of our eligible private equity portfolio by invested value (companies where Five Arrows has at least 25% ownership and one board seat) set SBTi-validated targets by 2029, and 100% by 2040.
Selected transactions
KEV Group is the leading North American fund management and accounting software and integrated payments solutions provider for K-12 public schools. Five Arrows knows the intersection of payments and EdTech space well, following investments in Springbrook, Everway and KidsKonnect. We were able to vintage the business with distinctive access due to long-standing relationships with the CEO, sell-side adviser, and existing minority shareholder.
We plan to accelerate growth by further penetrating the K-12 market, upgrading the go-to-market engine and improving cross-sell of payment solutions to software clients. KEV also has significant potential to grow inorganically within its existing verticals and into high-growth adjacencies.
Schivo Medical is a Contract Development and Manufacturing Organisation (CDMO) engaged in the design and manufacture of components for original equipment manufacturers and innovators in medtech and life sciences. It was identified through our sub-sector coverage work in the medtech outsourced services market and we leveraged our deep insights to position Five Arrows as the preferred investor.
We plan to grow Schivo’s existing customer platforms, expand into new projects with existing customers, win new customers and grow into adjacencies. We also expect to further consolidate the highly fragmented CDMO market through M&A.
Via Equity is a tailor-made secondary transaction which included 13 small-cap Nordic companies focused on IT and software services. Via Equity was sponsored by Danish public pension funds but wanted to become independent. We succeeded in securing a proprietary transaction due to the relationship we built over two years with an "under the radar" Danish GP. This resulted in privileged access to information during the diligence period, allowing us to negotiate an attractive price. We further incentivised the Via Equity team who also significantly invested.
Since the transaction closed in 2020, Via Equity has successfully sold 10 companies for a 2.5x gross return, returning 140% of the original investment as of June 2024.
Gresham is a leading multinational provider of data management and reconciliation software, principally supporting large financial services industry clients. Our Direct Lending funds had been lenders to Alveo Technologies, a leading player in this space, for some time.
Given our deep understanding of the market and close relationship with both the management team and private equity sponsor, we were selected as sole debt financing provider for the transformational acquisition of Gresham by Alveo, a listed business in an adjacent product vertical, creating a scaled software platform in a mission-critical segment.
Harvest is the leading French provider of front-office wealth management software solutions for more than 4,000 retail banks, insurance companies and independent financial advisers. In May 2024, we sold our majority stake in Harvest generating a 5.2x gross return.
We helped Harvest transition from a founder-led local software provider to a leading European SaaS player, growing revenue by 3x and EBITDA by 4x, by migrating customers off on-premise products, launching two high-growth products, strengthening management, and executing four complementary add-ons.
GLI invests in the equity tranche of CLOs managed by our Credit Management team. In 2024, this strategy issued three new CLOs, refinanced the liabilities of three further CLOs and reset three others, two of which were increased in size. The Credit Management team were responsive to attractive market conditions which allowed them to increase projected returns on six existing CLOs as well as issue three new CLOs at attractive projected returns.
