"The KGAL Group’s aviation asset class set a record in the 2017 financial year, achieving a new business volume of c. €1.3 billion. This represents an increase of 30% year on year. KGAL‘s aviation team was able to acquire 21 aircraft valued at €740 million for its institutional funds. Furthermore, KGAL successfully won new lessees. Mandates for new transactions in the three-figure million range have already been received for the 2018 financial year."
2017 was a very successful year for the aviation division. “We succeeded in
investing our Aviation Portfolio Funds, with very good transactions, in a relatively
short timeframe” explained Jochen Hörger, Managing Director of KGAL
Investment Management GmbH & Co. KG, who is responsible for the aviation
asset class. The return on investment targets have been met. Institutional
investors appreciate the structuring expertise of KGAL and technical expertise of
GOAL German Operating Aircraft Leasing. “The very low correlation with
traditional investments and the bond-like nature of aviation investments are
persuasive arguments for insurers and pension providers who are looking at this
type of sustainable income driven infrastructure investment,” explained Douglas
Edwards, Member of the Executive Board of KGAL Capital GmbH & Co. KG.
Expansion in every direction – aircraft, regions, lessees
KGAL Investment Management succeeded in expanding its aviation business on
a number of levels. In collaboration with its majority owned GOAL subsidiary, the
aviation team was able to acquire airlines such as Avianca, Oman Air and VietJet
as new lessees in 2017. A total of 22 aircraft (2016: ten aircraft) were purchased,
including one own investment of GOAL. These include three wide bodies, eleven
narrow bodies and eight regional aircraft. Four aircraft were sold in the same
period (2016: three aircraft), including three Embraer EMB 195 and one Airbus
A340-300 aircraft. Furthermore Japanese Operating Leases (JOL transactions)
were arranged for six Lufthansa aircraft via KGAL’s joint venture with Lufthansa -
Lufthansa Leasing GmbH.
Expectations met – KGAL Aviation Portfolio Fund (APF) right on track
KGAL currently offers investments in APF 3, the successor fund of APF 1. APF 1
is already fully placed with an investment volume of €800 million. The first closing
of APF 3 took place in the summer of 2017. “Based on the existing seed portfolio
and high pace of investment, we expect further equity commitments,” commented
Douglas Edwards, KGAL Capital. The final close is planned for 2019.
Mandates for transactions in the three-figure million range have already been
secured for the 2018 financial year. “We will continue to focus on highlymarketable
aircraft such as narrow bodies,” added Jochen Hörger, KGAL
Investment Management. In addition, the aviation division intends to promote club
deals among international investors.