Fixed income asset manager PIMCO and GE Capital Aviation Services have agreed to launch a $3 billion aviation leasing investment platform.
The firms said the platform will allow the acquisition of young, fuel-efficient aircraft to meet the needs of global airlines to upgrade their fleets over the coming years.
Initially, the portfolio will focus on narrow-body aircraft but will also have flexibility to invest in opportunities in the wide-body market. Investments will consider criteria including an airline’s assets, credit quality and geographic factors.
PIMCO is already a major investor in aviation-backed debt, and said the combination with GE Capital’s experience in aircraft leasing will provide flexibility to finance the global airline industry. GE will source transactions for the platform, providing serving for the aircraft and asset management.
Dan Ivascyn, group chief investment officer at PIMCO, said: “As the airline industry struggles with the effects of the COVID-19 pandemic, the PIMCO-GECAS platform will inject essential liquidity into this critical industry by providing financing solutions at a time when there are fewer traditional financing options for airlines.”
He added that aircraft remains an attractive asset class supported by long-term growth drivers.