At Arrived, we prioritize responsible stewardship of our clients' investments. We take this responsibility seriously and are committed to maintaining transparency with our investors and the broader investment community. To achieve this, we ensure that our performance results are accurate and honest and make our methods and internal processes open and transparent.
Our investment principles are the guiding principles we use to make informed decisions when acquiring and managing residential real estate investments.
We prioritize our investors and their interests above all else. We are grateful for their trust in us and strive to earn it by being transparent, fair, and responsive. To achieve this, we keep our investors informed with clear, honest information, offer competitive fees, and actively listen to their feedback. Our goal is to build long-term relationships with our investors, where everyone benefits.
Through a rigorous selection process, we aim to identify assets that, based on our analysis, have the potential to perform strongly within a given market, time period, and level of risk.
Investing in real estate with a buy-and-hold mentality is often seen as a reliable way to generate wealth over time. At Arrived, our strategies are intended for long-term holding rather than short-term investments of months or days.
Our real estate investment strategy addresses risks and strives for stability for our investors. This is pursued through careful asset selection, financing strategy, and insurance coverage.*
Our approach prioritizes the selection of attractive assets, taking into account the rapidly changing market cycles. Our method is designed to provide our clients with real estate prospects based on our analysis and intelligent resource allocation rather than attempting to time the market for the lowest price.*
We believe in diversification as a powerful tool to reduce the risk of losses. Therefore, we offer our investors a wide selection of assets, individually or as a fund, so they can easily diversify their portfolios.
We know that high operating costs and fees can reduce investor returns. That's why we're committed to creating an efficient operating model utilizing automation and economies of scale to reduce those costs for investors.
We believe in the power of data and its ability to inform decisions that optimize investor returns. Investing in real estate is also a very human experience. Beyond our data, we rely on our expert team members and local partners to make decisions.
We always search for ways to align incentives across our different stakeholders, whether that is the residents in our properties or our property managers. Aligned incentives allow us to increase returns for our investors while maximizing value creation across the board.
Have more questions? Visit our Frequently Asked Questions for in-depth answers.
Interested in adding real estate to your portfolio? With Arrived, anyone can invest $100 to $15,000 per property in a range of rental homes across dozens of markets.
*All investments carry inherent risks, and stability is not guaranteed. While we strive to make informed decisions, we cannot guarantee performance or returns.
The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. The views reflected in the commentary are subject to change at any time without notice.
A high-growth, non-correlated asset class delivering premium returns with measurable impact
| Asset Class | Yield | Risk Level |
|---|---|---|
| Digital Credit | 8-15% | Medium |
| IG Corporate Bonds | 4-6% | Low |
| Public Equities | 8-12% | High |
| Bank Deposits | 3-5% | Very Low |
Based on actual platform returns and market indices. $100,000 initial investment
CONFIDENTIAL INVESTMENT MEMORANDUM
This document presents the investment framework for institutional-grade private credit allocations. The platform provides access to directly originated senior-secured loans with target returns of 9-13% IRR. All investments undergo rigorous underwriting and are structured with multiple layers of creditor protection.
The $1.2 trillion private credit market represents a structural opportunity created by post-2008 banking regulations. Traditional lenders have retreated from middle-market financing, creating a persistent capital gap that private credit platforms are positioned to address.
| Factor | Impact | Timeline |
|---|---|---|
| Bank Regulatory Capital Requirements | Reduced traditional bank lending capacity by approximately $400B in target segments | Structural (Post-2010) |
| Institutional Demand for Yield | Pension funds and insurance companies allocating 15-25% to private credit strategies | 2015-Present |
| Floating Rate Advantage | 85% of loans structured with SOFR + spread, providing natural inflation hedge | Current Cycle |
| Technology-Enabled Origination | Digital platforms reducing underwriting costs by 40-60% versus traditional methods | Accelerating |
The current market environment presents a particularly favorable entry point for private credit investors. Spreads have widened by 150-200 basis points since 2021, while underwriting standards have remained disciplined. This combination of higher yields and maintained credit quality is historically uncommon.
Our investment committee employs a rigorous four-tier underwriting process focused on capital preservation. Each loan undergoes approximately 200 discrete checks before approval.
| Phase | Key Activities | Duration | Approval Rate |
|---|---|---|---|
| Initial Screening | Application review, credit scoring, preliminary background checks | 2-3 days | 35% |
| Due Diligence | Financial modeling, collateral assessment, legal structure review | 10-14 days | 55% |
| Investment Committee | Structured debate, risk scoring, term sheet negotiation | 5-7 days | 75% |
| Documentation & Closing | Legal documentation, funds escrow, security registration | 7-10 days | 95% |
| Parameter | Minimum | Target | Maximum |
|---|---|---|---|
| Loan-to-Value Ratio | 50% | 65-75% | 80% |
| Debt Service Coverage Ratio | 1.20x | 1.35-1.50x | — |
| Minimum FICO Score | 680 | 720+ | — |
| Loan Term | 12 months | 24-36 months | 60 months |
| Minimum Interest Coverage | 2.5x | 3.0-4.0x | — |
The platform has originated $850M in loans since inception with a historical default rate of 0.42% and recovery rate of 94.2%. Performance has been consistent across market cycles.
| Vintage | Total Originated | Average IRR | Default Rate | Recovery Rate |
|---|---|---|---|---|
| 2019 | $87M | 10.8% | 0.38% | 96.4% |
| 2020 | $92M | 11.2% | 0.51% | 93.8% |
| 2021 | $125M | 9.9% | 0.29% | 95.1% |
| 2022 | $168M | 12.4% | 0.33% | 94.6% |
| 2023 | $192M | 13.1% | 0.41% | 92.9% |
| 2024 | $186M | 11.7% | 0.47% | — |
| Asset Class | 5-Year Return | Volatility | Max Drawdown | Correlation to Equities | Income Yield |
|---|---|---|---|---|---|
| Platform Private Credit | 11.4% | 4.2% | -3.1% | 0.18 | 9.8% |
| S&P 500 | 10.2% | 16.8% | -23.9% | 1.00 | 1.5% |
| Bloomberg US Agg Bond | 2.1% | 5.7% | -12.8% | -0.24 | 3.4% |
| Private Equity | 14.3% | 18.2% | -28.4% | 0.76 | 0.0% |
| Real Estate (NCREIF) | 6.8% | 8.9% | -15.2% | 0.42 | 4.1% |
The platform employs a multi-layered risk management approach focused on capital preservation. This framework has resulted in zero principal losses to date across the entire portfolio.
| Scenario | Property Value Decline | Interest Rate Increase | Vacancy Increase | Projected Default Rate | Impact on IRR |
|---|---|---|---|---|---|
| Baseline | 0% | +0 bps | +0% | 0.42% | 11.4% |
| Moderate Recession | -15% | +150 bps | +10% | 1.8% | 9.1% |
| Severe Recession | -30% | +300 bps | +25% | 4.2% | 6.4% |
| 2008-Level Crisis | -40% | +200 bps | +35% | 6.8% | 3.9% |
The platform offers multiple investment vehicles designed to accommodate different investor profiles and regulatory requirements. All vehicles provide pro rata participation in the underlying loan portfolio.
| Vehicle | Minimum | Term | Liquidity | Management Fee | Investor Profile |
|---|---|---|---|---|---|
| Direct Loan Participation | $100,000 | Loan Term | None | 1.0% | Accredited/Institutional |
| Fund Structure | $50,000 | 3+1+1 Years | Quarterly | 1.5% | Accredited |
| Regulation A+ Offering | $5,000 | 36 Months | Limited Secondary | 2.0% | Retail (US Only) |
| Professional Investor Fund | €100,000 | 5+2 Years | Semi-Annual | 1.25% | Professional (EU) |
| Fee Type | Rate | Calculation Basis |
|---|---|---|
| Management Fee | 1.00% | Annual, based on committed capital |
| Servicing Fee | 0.25% | Annual, based on outstanding principal |
| Performance Fee | 15.0% | Of returns above 8% hurdle rate |
| Origination Fee | 1.00% | One-time, paid by borrower |
| Default Management Fee | 10.0% | Of recoveries on defaulted loans |
Common institutional investor inquiries regarding platform operations and risk management.
The platform has experienced 7 defaults since inception (0.42% default rate) with an average recovery of 94.2% of principal. Recovery timelines have ranged from 6 to 18 months depending on collateral type and jurisdiction. All recoveries to date have exceeded the outstanding loan balance due to accrued interest and default interest provisions.
The platform employs a Chinese wall structure between origination and investment teams. All loans must be approved by the independent investment committee where no member has origination incentives. Additionally, the platform does not engage in principal investing alongside client capital, eliminating alignment issues common in merchant banking models.
The platform maintains fully redundant systems with daily encrypted backups to geographically separate locations. Loan servicing can be transferred to designated backup servicers within 72 hours. The legal structure ensures loan documents are held by independent trustees, and investor funds are custodied at major financial institutions with FDIC/SIPC coverage where applicable.
The compliance team includes former regulators from US, UK, and EU jurisdictions. The platform maintains active monitoring of 40+ regulatory regimes and employs a conservative approach to jurisdiction selection. Current operations are limited to markets with established legal frameworks for private credit enforcement and clear bankruptcy proceedings.
This memorandum is confidential and intended solely for qualified investors. Past performance is not indicative of future results. All investments involve risk including loss of principal.
This document does not constitute an offer to sell or a solicitation of an offer to purchase any security. Any such offer will be made only pursuant to a confidential private placement memorandum and related subscription documents. The information contained herein is qualified in its entirety by such documents.
Performance data represents historical results and is net of all fees and expenses. Past performance is not indicative of future results. Investments in private credit are illiquid and subject to loss of principal. There is no secondary market for these investments and no guarantee of liquidity.
This platform is available to accredited investors as defined in Rule 501 of Regulation D under the Securities Act of 1933. Certain offerings may also be available to qualified institutional buyers under Rule 144A and non-U.S. persons under Regulation S. European investors must qualify as professional clients or eligible counterparties under MiFID II.
© 2024 Private Credit Platform. All rights reserved. This material is proprietary and confidential. Unauthorized use, duplication, or distribution is prohibited. The information contained herein is subject to change without notice.