Carlyle to expand credit platform with Apollo Aviation acquisition

The Carlyle Group has entered into an agreement to acquire 100 percent of alternative investment firm Apollo Aviation Group by the end of January.

The merged company, which will be renamed Carlyle Aviation Partners, will serve as an extension of Carlyle’s Global Credit Segment, a source familiar with the matter said. The acquisition is meant to help expand the firm’s global credit strategies further into commercial aviation, the source added.

The purchase price and other details of the deal were not disclosed and Carlyle declined to comment, while an Apollo representative could not be reached by press time.

Apollo Aviation chairman Bill Hoffman and president Robert Korn will continue to lead the business once the acquisition closes, serving as co-heads of Carlyle Aviation.

Miami-based Apollo Aviation Group was founded in 2002 and invests across the aviation industry with focuses on commercial aircraft leasing, maintenance, and marketing and transitioning. The firm managed $5.6 billion in assets and 243 commercial aircraft as of 30 September.

In June, it closed on $950 million for its latest fund, SASOF IV, which is aiming for a 13-15 percent net internal rate of return, according to an investment memo from the Pennsylvania Public School Employees’ Retirement System (PennPSERS committed $150 million to the fund.) SASOF III closed on $833 million in October 2015.

The aviation industry has drawn over $207 billion in investments since 2009 just for financing airliner deliveries, according to Boeing data. Over $29 billion was invested from private capital markets for plane purchases in 2017.

Aerospace, defence and military are among Carlyle’s core investing strategies. The firm, along with FS Investment Corporation and AE Industrial Partners, sponsors Global Jet Capital – an aviation investment company. Carlyle has also participated in aviation company buyouts including Wesco Aircraft in 2006 and Dynamic Precision Group in 2011.

Carlyle is a global asset management company with over $210 billion of assets under management as of June. It invests across four different vehicles, including corporate private equity, real assets, global credit and investment solutions.