Germany's KGAL raises €400m for institutional aviation fund

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A dozen German institutional investors, including two Pensionskassen, have committed €400m to an aircraft fund run by asset manager KGAL.

The investments necessitated an early close of Aviation Portfolio Fund 1 (APF 1), with €400m having been the maximum amount of own capital the real asset specialist was seeking to raise.

The fund can be leveraged by up to 100%, allowing it to invest up to €800m.  

The Munich-based investment manager said a dozen German institutional investors had subscribed to the fund.

A spokesperson told IPE Real Estate this included two Pensionskassen and one Versorgungswerk.

The rest are insurers.

Versorgungswerke are first-pillar pension funds for professional groups in Germany.

Institutional investor demand remains high, and KGAL is therefore planning to place more aircraft portfolio funds, the asset manager said in a statement.

It is planning to launch APF 3 in the fourth quarter, while a second aircraft fund (APF 2), which has a more opportunistic strategy, is already operational.

APF 1 enters into contracts for aircraft leased to international airlines.

So far, it has secured contracts for 13 aircraft, which has used more than half of the capital it has to invest.

Jochen Hörger, managing director at KGAL Investment Management, said the fund had yield expectations of 6.5% and that its core investments so far were in this region.

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