Firms create new aircraft leasing fund

20 July 2016

 Fund to focus on sales and leaseback equity investments

Japan’s Sumitomo Mitsui Trust Bank (Sumi Trust) and Dubai-headquartered Novus Aviation Capital have created a new $200m aircraft leasing fund.

Called Ortus, the fund is designed to capture the demand from Japanese institutional investors and will consist of a portfolio of global airlines and commercial aircraft manufactured by Boeing and Airbus.

The fund will predominantly focus on sales and leaseback equity investments, a company statement said.

Ortus marks the initial foray of the Japanese bank into an equity aircraft leasing fund.

“After successfully growing our expertise and lending portfolio in the aviation industry… with the right risk management, we will see further growth and offer sound investment opportunities,” said Kengo Noguchi, managing executive officer at Sumi Trust.

Ortus follows the creation of Tamweel Aviation Finance in 2013, sponsored by Airbus, Development Bank of Japan and Germany’s Nord LB.

Novus has been focused on investing in commercial aircraft assets since 1994. It currently co-owns and manages $3bn aircraft-related projects.

Novus recently partnered with Qatar First Bank (QFB) to indirectly acquire two aircraft, which will be leased to Indonesia’s Lion Air.

An Airbus forecast has indicated that the GCC and Levant states will be requiring some 2,460 aircraft to meet rising air travel demand to the year 2034.

Globally, airlines aim to have an equal split between owned and leased aircrafts to protect their balance sheet, Mounir Kuzbari, Noivus managing director told MEED in 2015.

“It is a common practice even for the most profitable airlines to buy new airplanes, sell them to a leasing company and then lease them back in order to conserve cash and protect themselves during a down cycle,” Kuzbari said.

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