Aero Capital secures $413m for aircraft leasing vehicle

The leasing fund reached final close at a time of unprecedented turmoil in the airline industry.

Aviation leasing platform Aero Capital Solutions has held a final close of its second aircraft investment vehicle at $413 million.

The firm raised capital from a diverse investor base that included fund of funds, pensions, sovereign wealth funds, registered investment advisers, single and multi-family offices and qualified individuals.

In addition to the $413 million raised, Aero Capital Solutions will also utilise leverage and is currently negotiating a facility that will allow it to deploy a total of $1.2 billion.

The firm’s CEO and CIO, Jason Barany, acknowledged the difficult conditions facing the aircraft industry in a statement: “As we operate in a challenging economic environment, we continue to find interesting risk adjusted opportunities with an enhanced focus on airline credit quality and liquidity. With committed capital, our integrated platform and extensive in-house capabilities, ACS is able to extract incremental value from mid-life aircraft assets.”

Airlines have been hit particularly hard during the coronavirus pandemic as most air travel between countries has been suspended and demand has been curtailed by a widespread shutdown in the travel and leisure sector.

Aircraft leasing experts told Private Debt Investor that the industry is likely to be hit by a wave of requests to suspend lease payments or renegotiate terms as the airline industry struggles through the crisis. Some airlines have already signalled they are in serious financial distress, while others have requested government bailouts.

So far, Aero’s investment vehicle is approximately 35 percent deployed, as of the date of final close on 6 March, with 40 aircraft assets closed or under contract to close. The portfolio features a mix of mid-life Boeing and Airbus aircraft that are leased to a diverse group of airlines around the world.