KGAL Aviation reaches a record high in 2017

"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.

 

Attachment

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