Partners Group, acting on behalf of its clients, has invested USD 250 million as the sole lead investor in a continuation vehicle established by Avenue Capital Group to acquire a portfolio of 69 global commercial aviation projects. The approximately USD 360 million multi-asset continuation vehicle, named the Avenue Kite Continuation Fund LP, will be managed by Avenue Capital Group's aviation team, with Partners Group's infrastructure secondaries strategy serving as the anchor investor.
The portfolio, assembled over the past decade, consists of mid-life aircraft including narrowbody and widebody aircraft as well as regional jets. The lessee base is diversified across 30 airlines in Asia, Western Europe, and North America. Partners Group highlighted that the majority of the portfolio's cash flows are contracted, providing stable and predictable income, and the assets are structured to maximize residual values through re-leases, sales, or disassembly.
The commercial aviation leasing market is experiencing several tailwinds, including a structural undersupply of new aircraft due to production delays, which is increasing reliance on mid-life aircraft and spare parts. Additionally, aircraft engines are finding alternative industrial uses, supporting residual values and tightening supply dynamics.
Jeremy Semble, Head of Infrastructure Partnership Investments Americas at Partners Group, stated: "Aircraft leasing is a growing space within the infrastructure asset class. The Portfolio is asset-heavy with contracted cash flows and high barriers to entry, reflecting significant capex requirements and maintenance needs. This makes it a great fit for our infrastructure secondaries strategy, where we look to provide investors with diversified exposure to sectors with resilient demand and strong growth potential."
Marc Lasry, Co-Founder and CEO of Avenue Capital Group, commented: "This new continuation vehicle provided our existing limited partners with a compelling liquidity option and has allowed us to once again partner with Partners Group via a continuation vehicle, providing them with exposure to our strong portfolio of aviation projects that we have assembled over the past decade."
Partners Group's Infrastructure Partnership Investments business focuses on LP-led portfolios, GP-led investments, and complex situations across high conviction themes. The firm has completed over 70 infrastructure secondaries transactions since 2006 and is currently raising its latest infrastructure secondaries program, which includes a closed-end fund and mandates.
Partners Group was advised by Ropes & Gray, while Avenue Capital Group was advised by Latham & Watkins and Perella Weinberg Partners. For more information about Partners Group, visit partnersgroup.com. For more about Avenue Capital Group, visit their website or follow them on LinkedIn.
