JULY 15TH, 2014
KGAL: Investor profits thanks to attractive aircraft deal
Germany 15.07.2014 KGAL has sold its equity investments in twelve medium-haul Airbus A319 aircraft to a US investor as part of share deals. The majority of the aircraft were held in the SkyClass 58 retail fund. The sale has resulted in capital growth of more than 20% for investors in the retail fund.
This deal testifies to the appeal of tangible asset investments in aircraft: the SkyClass 58 retail fund and a number of private placements were originally due to have a term of five years. The opportunity arose for KGAL to sell the twelve Airbus A319 aircraft to a US investor after having had them for just around a year thanks to good market contacts of KGAL and the asset manager GOAL, which is a joint venture of Deutsche Lufthansa AG and KGAL. The deal has generated significant profits for the investors. For example, investors in SkyClass 58 have seen their capital increase by more than 20% before taxes within the space of a year.
The twelve aircraft built in 2004 and 2005 have been leased to a renowned European airline until the end of 2018. KGAL will continue to manage the investment while the aircraftâs technical asset management remains the responsibility of GOAL.
There is high demand for investments in aircraft, as their long-term rental agreements offer stable returns. This transaction by KGAL, which has more than 35 years of experience in the area of aircraft, is unusual for an asset manager. “Deals of this kind call for a very good understanding of the market and the current demand situation. And you also have to be able to react quickly and flexibly,” says Jochen Hoerger, head of the aviation division at KGAL.
KGAL’s portfolio for institutional investors currently includes an aircraft fund for the first time. The Aviation Portfolio Fund 1 will primarily invest in a number of passenger aircraft models leased to various international airlines. GOAL is contributing its asset management expertise to this fund as well. The planned volume of investment amounts to around EUR 200 million.