Partners Group, a leading global private markets firm, acting on behalf of its clients, and Avenue Capital Group, a global investment firm, have announced that Partners Group’s infrastructure secondaries strategy has invested 250 million dollars in Avenue Capital Group’s global commercial aviation leasing portfolio (the “Portfolio”).
According to Partners Group, the investment represents one of the largest transportation deals executed to date by Partners Group’s infrastructure secondaries strategy.
Partners Group is the sole lead investor in a multi-asset continuation vehicle of approximately 360 million dollars, created by Avenue Capital Group to acquire the Portfolio. Avenue Capital Group’s aviation team will continue to manage the assets, according to details provided by the companies in the agreement.
As revealed by both entities, the Portfolio is composed of 69 mid-life aviation projects, including narrow-body, wide-body, and regional jets. The lessee base is diversified among 30 airlines distributed across multiple geographies, including Asia, Western Europe, and North America.
“The majority of the Portfolio’s cash flows are secured through contracts, providing stable and predictable income. Furthermore, the structure seeks to maximize asset value upon lease expiration, whether through re-leasing, aircraft sales, or part-out operations,” Partners Group detailed.
The commercial aviation leasing market benefits from several positive structural factors, including a persistent shortage of new aircraft due to production delays, which is shifting the sector’s reliance toward mid-life aircraft and spare parts. Additionally, aircraft engines are increasingly being used in alternative industrial applications, boosting demand for legacy engines, sustaining their residual value, and further tightening supply.
Jeremy Semble, Head of Infrastructure Partnership Investments Americas at Partners Group, stated: “Aircraft leasing is a growing segment within the infrastructure asset class. The Portfolio is asset-intensive, features contractual cash flows, and presents high barriers to entry derived from significant capital investment and maintenance requirements. This fits perfectly with our infrastructure secondaries strategy, where we seek to offer investors diversified exposure to sectors with resilient demand and strong growth potential. We are pleased to partner once again with Avenue Capital Group, which has positioned the Portfolio very strongly in the current market environment.”
For his part, Marc Lasry, co-founder and CEO of Avenue Capital Group, noted: “This new continuation vehicle has provided our existing limited partners with an attractive liquidity option and has allowed us to partner once again with Partners Group through this structure, offering them exposure to our robust portfolio of aviation projects built over the last decade. Our Aviation team, led by Senior Portfolio Manager Shawn Foley, looks forward to continuing to capture the value of the projects within the Avenue Kite Continuation Fund LP in a market environment that is favorable for these types of assets.”
Partners Group’s Infrastructure Partnership Investments business focuses on LP-led portfolios, GP-led investments, and complex situations globally across high-conviction themes. Since 2006, the firm has completed more than 70 infrastructure secondaries transactions. It is currently raising its latest infrastructure secondaries program, which includes a closed-ended fund and co-investment mandates.
In the transaction, Partners Group was advised by Ropes & Gray, while Avenue Capital Group was advised by Latham & Watkins and Perella Weinberg Partners.
