Investec announces first close of its latest Aircraft Fund
Investec Aviation Finance has announced the first close of its aircraft fund, Investec Aircraft Syndicate Limited (IASL), which will invest $500m in new generation, fuel efficient aircraft on lease to airlines worldwide.
The fund will allow institutional investors to invest in aircraft, leased to airlines globally, giving high, single-digit yields. Investec Aircraft Finance currently manages more than £1bn of funds for institutional investors, and has pioneered the development of aviation finance as an asset class.
The size of the fund may be increased and the manager is in discussions with various parties looking to invest in its second raising.
IASL promises a cash yield paid from contracted fixed cashflows locked in for on average five years. It is a real asset with a record of stable and uncorrelated returns.
Investec’s previous offering, the Investec Global Aircraft Fund, which has many similar characteristics, manages 20 aircraft with an acquisition cost of some $1bn.
The funds have attracted investments from insurance companies, pension and superannuation funds, private banks and high net worth individuals across various geographies, the firm said.
IASL is managed by Ramki Sundaram and David Phillips, two senior members of Investec’s Aviation Finance division. They believe there is increasing demand for investment in this alternative real asset class, primarily due to the combination of good US dollar cash yields, stable and uncorrelated returns.
Investec Bank, listed in London and Johannesburg, has six business divisions: Private Banking, Capital Markets, Investment Banking, Asset Management, Private Wealth and Property Activities.
The 21-strong aircraft finance team is recognised for its experience in bank debt and capital markets financing as well as complex transaction structuring and execution skills. The team also has well developed relationships with manufacturers, lessors, airlines, banks and other providers of risk and financial capital to the industry.