KKR & Co. to invest USD 1.15 billion in commercial aircraft leasing

KKR & Co. will invest USD 1.15 billion in leased commercial aircraft through its partnership with aviation finance firm Altavair. Altavair currently holds aircraft ranging from Airbus A220-300s to Boeing 777 freighters.

The bet on air travel, made through KKR’s credit and infrastructure funds, adds to the roughly USD 8.3 billion that the alternative-asset manager has put into the aviation sector since 2015. KKR owns about 50% of Altavair.

KKR & Co. to invest USD 1.15 billion in commercial aircraft leasing

KKR has deployed and committed USD 1.7 billion of capital into aircraft deals since forming a partnership with Altavair and acquiring an interest in the company in 2018.

“We are thrilled to deepen our footprint in aircraft leasing through this new commitment, which underscores the conviction that we have in this space and our confidence in Altavair as a partner. We look forward to growing our portfolio further to support the fleet needs of airlines and operators around the world.”

Dan Pietrzak, KKR Partner and Co-Head of Private Credit

KKR, in partnership with Altavair, has acquired more than 90 commercial and freighter aircraft through a variety of transactions, including lessor trades, airline direct used and new delivery sale-leasebacks, structured transactions and passenger-to-freight conversions and has successfully leased more than 75% of the portfolio to tier-one airlines and operators around the world.

“Airlines are increasingly seeking greater liquidity and fleet flexibility, which is creating significant opportunities for high-quality leasing teams with deep access to private capital,” said Brandon Freiman, KKR Partner and Head of North American Infrastructure. “We are proud to serve this growing need in partnership with Altavair.”

“Aircraft leasing continues to be a dynamic and growing market that offers compelling and differentiated opportunities for experienced investors. The portfolio that we’ve created over the past several years further evidences the power of combining KKR’s quality capital and capabilities with Altavair’s deep technical and aircraft investing expertise and innovation. We greatly appreciate KKR’s ongoing trust in our platform and look forward to building further on this success in the years to come.”

Steve Rimmer, CEO, Altavair

Aviation finance provides stable, collateral-backed cash flow and is particularly attractive as the pandemic’s effects on the travel industry diminish, Pietrzak said in an interview. KKR is targeting double-digit returns across its portfolio of aviation-leasing assets.

KKR’s previous investments in the sector include AV AirFinance, Atlantic Aviation, KKR DVB Aviation Capital, K2 Aviation, Wheels Up, Global Jet Capital and Jet Edge, according to the statement.

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