KKR has expanded its asset-based finance strategy into directly-originated commercial aircraft loans.
The global investment firm has launched AV AirFinance, a lending platform, with a team of industry professionals to offer financing solutions to customers around the world.
KKR said AV AirFinance has agreed to buy an $800m (€657m) portfolio of aviation loans from CIT Group, including over 50 loans for approximately 60 commercial aircraft. The portfolio acquisition from CIT is being funded by separate accounts managed by KKR.
AV AirFinance is led by CEO Siggi Kristinsson, who most recently co-founded and served as CEO of Volito Aviation Services.
KKR said Ryan Jasinski joins the AV AirFinance team from CIT as part of the related portfolio purchase and will continue to focus on loan origination in the Americas.
Per Waldelof, former president of PK AirFinance, serves as a consultant advising on loan origination and other aspects of AV AirFinance’s operations.
Dan Pietrzak, partner and co-head of private credit at KKR, said: “AV AirFinance is an exciting expansion of our asset-based finance strategy into directly originated commercial aircraft loans, which represent an attractive downside protected investment opportunity for our long-term capital.”
Kristinsson said: “We are very excited to be entering the market at this time to participate in the social and economic recovery, which is driving demand for commercial aviation and increasing the importance of the long-term financing solutions that support the industry.
“With our strong foundation, experienced team and the support of KKR, AV AirFinance is well-positioned to deliver tailored lending options and flexible terms that enable commercial aviation customers to achieve their business goals.”
Patrick Clancy, principal at KKR, said the launch of a dedicated aviation lending platform marks a significant milestone for KKR in the aviation sector, building on the firm’s experience in areas including commercial aircraft leasing and private aviation.
KKR’s previous investment in the aviation sector includes investments in Altitude Aviation, Altavair, KKR DVB Aviation Capital, K2 Aviation, DCAL Aviation, Wheels Up, Global Jet Capital and JetEdge.
“We are thrilled to partner with the AV AirFinance team to offer differentiated solutions to the market, and we see significant opportunities for future growth supported by a large market opportunity and the favourable long-term outlook for the commercial aviation industry,” Clancy said.
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