Investec Bank will target narrowbodies with an equity fund it launched on 24 September, according to Alok Wadhawan, the bank’s head of aviation finance.
“The target is narrowbodies primarily and they will tend to be from new to mid-life. They will be between zero and 10 years old – we wouldn’t be looking at 15-year-old aircraft,” he said in an interview with Airfinance Journal.
The fund, Investec Aircraft Syndicate, will have a seven-year life and a hard cap of $500 million in equity. The bank has already secured commitments of over $150 million, of which Investec contributed 20%, says Wadhawan.
Although the fund will mainly focus on single-aisle aircraft, it will also contain widebodies.
“In terms of widebodies, it’s very selective. There will be a very small percentage of widebodies as was the case in our previous funds – between 15-20%,” he adds.
“For the widebodies, we are looking at longer leases – a minimum of five-plus years. Typically, we would expect more eight- to 10-year leases.”
The fund has not yet acquired any aircraft, but Wadhawan says investments will start in fourth quarter of this year or in the first quarter of next year.
Investec Aircraft Syndicate’s second close is expected in the first quarter of 2019.
“We didn’t go out wide on first close, it was from our existing investors and investors who had shown interest to invest in our previous funds. We expect to have one or two more capital raises in the future, tapping the wider market to achieve our target capital raise of $500 million,” says Wadhawan.
Wadhawan expects Investec Aviation to increase its assets under management from $6.5 billion to $10 billion in the next two to three years.
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