New York State Common Retirement Fund (NYSCRF) is backing an aircraft-leasing fund managed by Castlelake despite ongoing pressures on the airline sector.
NYSCRF has approved a $150m (€127m) commitment to Castlelake Aviation Stable Yield IV, which will buy, manage and lease aircraft and engines.
Asked about the timing of the investment, NYSCRF pointed to growth in global air passenger numbers prior to the COVID-19 pandemic, which had been climbing in line with the increase in middle-class populations.
“This demand, coupled with the duopoly of new aircraft manufactures contributed to a reliable valuation for aircraft during the useful life,” the pension fund told IPE Real Assets.
“The ability for aircraft owners to market these planes and engines globally reduces the impact of a defaulting lessee in the portfolio.”
NYSCRF said it believes Castlelake “can generate high cash flow from leasing to counterparts around the world while providing exit options during uncertain times”.
The commitment is the pension fund’s first investment with Castlelake. NYSCRF has previously invested in aviation funds managed by Carlyle.
Castlelake did not respond to a request for comment.
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