The Canada Pension Plan Investment Board (CPP Investments) has entered into an agreement to sell its remaining interests in its European non performing loan (NPLs) portfolio to a newly-formed joint venture vehicle established between funds managed by affiliates of Arrow Global Group and funds managed by affiliates of Fortress Investment Group.

The agreed transaction will deliver net proceeds to CPP Investments of approximately C$1bn (£540m) across the total portfolio. The transaction is expected to close in May 2026.

“Following a comprehensive review of the portfolio and its long-term outlook, we have taken the  decision to exit this investment and transition the remaining assets to specialised operators with deep  local servicing capabilities,” said Ben Mason, managing director, head of European credit at CPP Investments. 

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“This transaction reflects a disciplined approach to portfolio management and allows us  to redeploy resources toward opportunities where we see stronger risk-adjusted returns.” 

Both Fortress and Arrow have significant experience in managing and servicing complex credit portfolios across Europe, and the new partnership structure is designed to support the active management of  the remaining assets.

“This transaction leverages the non-performing loan investing and servicing capabilities that we have  developed over more than two decades,” said Francesco Colasanti, head of Europe and co-head of European NPLs at Fortress.

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“This builds on our broader relationship with CPP  Investments and reflects our shared confidence in the value of this portfolio and the opportunity  ahead. Together, Arrow and Fortress bring direct servicing experience on the portfolio, alongside deep  local capabilities across Europe,” added Zach Lewy, Founder, chief executive and CIO of Arrow.