KKR partners with Altavair in $1bn aircraft investment

04 / 01 / 2019

US-based Global investment firm KKR is linking up with Altavair AirFinance with an initial $1bn capital commitment, part of which will go towards the acquisition of six “cargo aircraft” on long-term lease with “a diverse group of airline counterparties”.

Dan Pietrzak, a member of KKR, said: “Since our first investment in aircraft in 2015, we’ve recognised the increasing demand for both passenger and freighter aircraft.

“The decades-long proven track record that Altavair brings to this partnership is impressive and it is exactly the kind of company we were looking for when we sought out continued investment in aviation.”

KKR and US-based Altavair — a commercial aviation finance specialist whose airfreight customers listed on its website include Cargojet, Atlas Air and Kalitta — have entered into an agreement to form a long-term partnership to “pursue the creation of a leading, global portfolio of leased commercial aircraft”.

A joint statement by the two partners said: ”KKR will make a $1bn capital commitment primarily from its credit and infrastructure funds, which may be supplemented with additional commitments over time, to acquire commercial aircraft in partnership with Altavair over the next several years and Altavair will be KKR’s partner for aircraft leasing investments going forward.

“KKR will also acquire a 50% interest in Altavair as part of the long-term partnership. KKR’s initial investment will go towards the acquisition of six cargo aircraft on long-term lease with a diverse group of airline counterparties.”

Altavair's current portfolio of passenger and all-cargo aircraft, as listed on its website, includes four Boeing 747-400ERFs and two Boeing 777Fs.

Brandon Freiman, member & head of North American Infrastructure at KKR, said: “Commercial aircraft are critical, long-lived assets that we’ve been interested in pursuing for several years. We are excited to partner with Altavair’s world class management team to invest in the global aviation market.”

Altavair chief executive Steve Rimmer said: “We are extremely happy to have found a partner in KKR that shares our vision for investing in the aircraft leasing and financing sector.

“The tremendous support and expertise offered by KKR alongside its exceptional global investor base will allow Altavair to fully participate in this growing market and provide a solid foundation for Altavair’s future growth and success.”

Altavair was formed in October 2016 when Guggenheim Partners, a global investment and advisory firm, sold its commercial aircraft investment and management business, Guggenheim Aviation Partners (GAP), to the GAP management team.

GAP was founded in 2003 as a joint venture between Guggenheim and aircraft industry veterans Rimmer and Paul Newrick.