AAR is expanding its commercial aircraft asset management activities by partnering with Napier Park Global Capital (Napier Park) to create a joint venture that will focus on acquiring late life commercial aircraft. AAR has been appointed the sole servicer for the newly formed strategic alliance.
Under the agreement, AAR will bring its aircraft MRO, leasing and trading experience to the role of asset manager. AAR will establish and manage the aircraft portfolio, as well as develop exit strategies. The main focus is on acquiring yield generating assets maximizing returns as aircraft reach the end of operational life. AAR will work with majority partner, Napier Park, to target assets that retain value in the aftermarket once aircraft retire from service.
“We appreciate the opportunity to lend our extensive expertise in the aviation aftermarket to provide significant competitive benefits to the new venture,” says Pat Aherne, senior vice president and general manager, AAR Aircraft Sales & Leasing. “As the third largest aircraft MRO in the world and one of the largest suppliers of engine and airframe components, AAR brings a broad range of products and service capabilities to the role of aircraft asset management.”
Napier Park is an alternative investment manager that, as of September 30, 2018, managed $11.5 billion in capital and will be the majority equity participant in the joint venture. Napier Park manages CLOs, credit and private investments on behalf of institutional investors globally. Napier Park’s Real Assets group manages approximately $6 billion of equipment assets and seeks to generate attractive long-term returns through investments in long-lived essential use industrial and transportation equipment, generally alongside leading industry operating partners like AAR.
BNP Paribas acted as exclusive financial and capital raising advisor to AAR in the transaction.