Partners Group announced that it has invested $250 million in Avenue Capital Group’s global commercial aviation leasing portfolio.
The investment was made through Partners Group’s infrastructure secondaries strategy on behalf of its clients.
Partners Group said the investment is one of the largest transportation transactions completed by its infrastructure secondaries strategy to date.
Partners Group is the sole lead investor in an approximately $360 million multi-asset continuation vehicle established by Avenue Capital Group to acquire the portfolio.
Avenue Capital Group’s aviation team will continue to manage the assets.
The portfolio consists of 69 mid-life aviation projects across narrowbody aircraft, widebody aircraft, and regional jets.
The lessee base is diversified across 30 airlines across multiple geographies, including Asia, Western Europe, and North America.
Partners Group said the majority of the portfolio’s cash flows are contracted, providing stable and predictable income.
The portfolio is also structured to maximize aircraft asset values at the end of contracts through re-leases, aircraft sales, or aircraft disassembly.
The companies said the commercial aviation leasing market is benefiting from structural tailwinds.
These include an undersupply of new aircraft due to production delays, which is increasing industry reliance on mid-life aircraft and spare parts.
They also noted that aircraft engines are increasingly being used for alternative industrial applications, supporting demand for legacy engines, residual values, and broader supply dynamics.
Partners Group’s Infrastructure Partnership Investments business focuses on LP-led portfolios, GP-led investments, and complex situations globally across high-conviction themes.
The firm has completed more than 70 infrastructure secondaries transactions since 2006.
Partners Group was advised by Ropes & Gray on the transaction.
Avenue Capital Group was advised by Latham & Watkins and Perella Weinberg Partners.
Partners Group has over $185 billion in assets under management globally.
Avenue Capital Group has approximately $9.2 billion in assets under management and focuses on specialty lending, opportunistic credit, and special situation investments.
KEY QUOTES:
“Aircraft leasing is a growing space within the infrastructure asset class. The Portfolio is asset-heavy with contracted cash flows and high barriers to entry, reflecting significant capex requirements and maintenance needs. This makes it a great fit for our infrastructure secondaries strategy, where we look to provide investors with diversified exposure to sectors with resilient demand and strong growth potential. We are pleased to partner once again with Avenue Capital Group, which has positioned the Portfolio well in the current market environment.”
Jeremy Semble, Head of Infrastructure Partnership Investments Americas at Partners Group
“This new continuation vehicle provided our existing limited partners with a compelling liquidity option and has allowed us to once again partner with Partners Group via a continuation vehicle, providing them with exposure to our strong portfolio of aviation projects that we have assembled over the past decade. Our Aviation team, led by Shawn Foley, Senior Portfolio Manager, looks forward to continuing to realize the value of the projects in the Avenue Kite Continuation Fund LP in a favorable market environment for such assets.”
Marc Lasry, Co-Founder and CEO of Avenue Capital Group
