Partners Group, a global private markets firm, has invested USD 250 million as the sole lead investor in a continuation vehicle established by Avenue Capital Group to acquire its global commercial aviation leasing portfolio. The approximately USD 360 million multi-asset vehicle, named Avenue Kite Continuation Fund LP, will allow Avenue's aviation team to continue managing the 69 mid-life aviation projects assembled over the past decade. The transaction represents one of the largest transportation deals by Partners Group's infrastructure secondaries strategy to date.
The portfolio is highly diversified across narrowbody aircraft, widebody aircraft, and regional jets, with a lessee base spanning 30 airlines in Asia, Western Europe, and North America. According to the announcement, the majority of cash flows from the portfolio are contracted, providing stable and predictable income. The structure is designed to maximize asset values at contract end through re-leases, aircraft sales, or disassembly.
Jeremy Semble, Head of Infrastructure Partnership Investments Americas at Partners Group, noted that aircraft leasing is a growing space within infrastructure, characterized by asset-heavy, contracted cash flows and high barriers to entry due to significant capital expenditure and maintenance requirements. He emphasized that the portfolio fits well with the firm's infrastructure secondaries strategy, which seeks diversified exposure to sectors with resilient demand and strong growth potential.
The commercial aviation leasing market benefits from several tailwinds, including a structural undersupply of new aircraft caused by production delays. This situation shifts industry dependence to mid-life aircraft and spare parts. Additionally, aircraft engines are increasingly used for alternative industrial applications, supporting residual values and tightening supply dynamics.
Marc Lasry, Co-Founder and CEO of Avenue Capital Group, stated that the continuation vehicle offered existing limited partners a compelling liquidity option and allowed Avenue to partner again with Partners Group. He expressed confidence in the aviation team, led by Senior Portfolio Manager Shawn Foley, to realize value in a favorable market environment.
Partners Group's Infrastructure Partnership Investments business focuses on LP-led portfolios, GP-led investments, and complex situations across high-conviction themes. The firm has completed over 70 infrastructure secondaries transactions since 2006 and is currently raising its latest infrastructure secondaries program. Partners Group was advised by Ropes & Gray, while Avenue Capital Group was advised by Latham & Watkins and Perella Weinberg Partners.
Further details about Partners Group can be found at www.partnersgroup.com. Avenue Capital Group's media contact is Todd Fogarty of Kekst CNC, reachable via todd.fogarty@kekstcnc.com.
