Investec Aviation Finance has completed the first close on its second fund targeting aviation debt after it raised around $200 million from European investors.
The fund aims to build a portfolio focused on senior debt, but will include some mezzanine tranches, and is seeking to reach an overall sum of $500 million from investors. The fund has attracted commitments from European insurers and is aiming for returns of between 4 and 4.5 percent.
The fund was launched last March and Investec has committed $50 million. The firm’s policy is to invest 10 percent in its managed platforms.
Investec closed its first fund targeting aviation debt under the name the Aquila Debt Fund in 2014 and obtained a return of between 4 and 4.5 percent on investment. Overall, the first fund raised $500 million in capital from investors.
PDI understands that there has been no agreement over the name of the second fund. At the moment, the firm manages around $700 million across both funds and in a statement said it is on course to reach $1 billion by the end of this year.
“This return is highly attractive for European investors in the current yield environment. This is another milestone for us as we expand our debt assets under management for institutional investors,” said Alok Wadhawan, co-head of aviation finance at Investec Bank.
Investec Bank is a global investment firm founded in South Africa in 1974. Investec Aviation Finance was established in 2003 and provided mezzanine funds for aviation companies. It holds $5 billion of aircraft assets under management, according to a statement from the firm.