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Feature: The private equity exit
13 May 2011
What expectations are driving the new breed of leasing companies, and can they deliver?
This time last year the
talk was of new money discovering aircraft leasing. Since then,
more than $4 billion came from private equity alone. But there
is no such thing as a free lunch.
Private equity investment
in aviation is changing the game. Now lessors, with their
backing, can focus on new aircraft deliveries, long-dated
leases, and stable cash flows - building toward an initial
public offering (IPO) or a trade sale at the top of the
Two startups have been
particularly successful raising capital in the private equity
arena. Avolon and Air Lease Corporation (ALC) have raised $1
billion and $1.3 billion, respectively, from private equity
shareholders since establishing their businesses last
The private equity/lessor
dynamic is important because the proportion of the global fleet
that leasing companies are financing is increasing as the
number of yearly deliveries grow.
In 2004 there were about 500...
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