Aircraft Leasing Joint Venture Initiated by AIP Capital and Monroe Capital
In a strategic move to significantly impact the aviation leasing sector, AIP Capital and Monroe Capital have announced a partnership aimed at acquiring a diversified portfolio of mid-life commercial aircraft, valued at up to $1 billion.
The venture, expected to scale over the coming months, will see Monroe Capital providing the investment capital, with an initial $500 million senior secured warehouse facility secured from Deutsche Bank AG New York Branch and Fifth Third Bank. This financial backing will support the first phase of asset purchases.
The partnership is designed to offer scalable and stable capital, a valuable asset given the increased volatility in global capital markets. This increased financial stability aims to provide more robust financing options to airline customers and lessor trading partners.
AIP Capital, on the other hand, will act as the asset servicer, responsible for managing portfolio operations and day-to-day engagement with airline clients. Their operational expertise is expected to add value and efficiency to the leased aircraft portfolio.
Jared Ailstock, Managing Partner at AIP, announced the partnership with Monroe Capital Alternative Credit Solutions. He expressed confidence in the venture, stating that capital markets volatility does not affect its potential.
The partnership capitalizes on both firms’ strengths—Monroe Capital’s financing capabilities and AIP Capital’s asset management and client engagement skills—to deliver attractive, risk-adjusted returns for investors and enhanced service for airlines.
Aaron Peck, Managing Director & Co-Head of Alternative Credit Solutions at Monroe, expressed his pleasure at partnering with AIP, stating that aviation is a natural extension of their platform, positioning them to deliver attractive, risk-adjusted returns for their investors.
The collaboration targets the acquisition of a diversified portfolio of mid-life commercial aircraft, on long-term lease to airlines worldwide. By combining capital resources and servicing expertise, the partnership is positioned to enhance value for global airline customers and lessor trading partners, while also offering investors a new avenue for participation in aircraft leasing markets.
The partnership specifically targets sectors with strong asset fundamentals and long-term demand visibility, aiming to deliver stable returns even in uncertain market conditions. This strategic alignment reflects Monroe's strategy of aligning with experienced operators in sectors with strong asset fundamentals and long-term demand visibility.
Milbank served as transaction counsel to Monroe in the venture, while Gibson Dunn served as transaction counsel to AIP Capital. KPMG acted as tax advisor to Monroe in the venture, and PwC acted as tax advisor to AIP Capital.
In summary, the partnership aims to bring significant investment firepower and professional asset servicing to the aircraft leasing market, supporting airlines and investors with scalable capital and high-quality management in a sector marked by durable assets and steady demand.
The partnership between AIP Capital and Monroe Capital, focused on acquiring a diversified portfolio of mid-life commercial aircraft, will be financed by Monroe Capital, with initial capital provided through a $500 million senior secured warehouse facility. This financial backing aims to provide more robust financing options to airline customers and lessor trading partners, demonstrating the venture's intent to offer scalable and stable capital in the face of increased volatility in global capital markets.
