Investec Aviation Finance, part of Investec Bank, has closed its second managed aircraft debt fund for European insurers and said it will reach $1 billion in managed debt fund assets by the end of 2016.
The aircraft debt fund has a target yield of 4-4.5% after fees, which Investec Bank co-head of aviation finance, Alok Wadhawan, said was very attractive for investors in the current yield environment. The fund has a single A rating from FERI EuroRating Services, which Investec said helped insurers governed by the Solvency II regulations. It added that it plans to build up a portfolio of secured aviation debt, with senior and mezzanine tranches. Wadhawan commented: “We always participate alongside our investors through co-investment on our balance sheet hence ensuring strong alignment of interest between ourselves and our clients.”
Investec Aviation Finance closed its first fund, the Aquila Debt Fund, in 2014, and it now has around $700 million invested across two funds. It operates leasing transactions with major airlines, arranging, warehousing and then selling aircraft with leases attached. It has roughly $5 billion in aircraft assets under management through its own balance sheet and debt and equity funds.