Sacramento County Employees’ Retirement System (SCERS) has added Sky Leasing to its manager lineup by making a $40m (€37.3m) capital contribution to the manager’s latest aviation fund.
The pension fund disclosed in a board meeting document that it committed the capital to Sky Leasing Fund VI, a fund seeking to raise $1.5bn.
Sky Leasing announced a $770m final close for the predecesor fund Sky Fund V in January last year. At the time, the manager said Fund V will focus on providing capital solutions to airlines seeking fleet modernisation primarily through the sale-leaseback of new aircraft deliveries.
Steve Davis, chief investment officer of SCERS, said: “Investments in the fund are with leases that are long-dated and have seniority in the capital structure and enhanced security to senior, secured private credit loans.”
Davis said, Sky Leasing was identified as a preferred manager due to its 30-year history, “strong track record, in-house technical team, a focus on new-life narrowbody aircraft, and its prior funds were fully realised over an average three-year hold period.”
Fund VI is targetting net returns, after accounting for leverage, in the range of 12% to 15%. Additionally, it aims to generate a cash yield of 10% to 12%.
SCERS is making the opportunistic investment through its private credit asset class portfolio, valued at $646.8m as of the end of the first quarter of this year. The portfolio invests in various assets, including private infrastructure debt.
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