Investment management company Castlelake has established a Bermuda-licensed reinsurance company for buyers and owners of commercial aircraft assets.
Known as Itasca Re, the new business is to provide "competitive financing rates for aircraft asset buyers by transferring the non-payment risk traditionally held by financiers to third parties via an insurance policy issued by Starr Insurance Companies that is reinsured by Itasca Re and other potential third-party reinsurers pursuant to a dedicated reinsurance agreement", according to a statement by Castlelake.
Providing a "dedicated focus on aircraft secured financing", Istasca Re will be staffed by a team whose experience will "enable more nuanced asset-secured insurance financing solutions than what has been available in the current insurance market", Castlelake said.
Itasca Re will be headed by "experienced aviation industry veteran" Kostya Zolotusky, who most recently led the integrated finance linked insurance division of Piiq Risk Partners, an insurance broker focused on the aviation sector and associated with The Ardonagh Group, the UK's largest independent insurance broker.
Piiq will provide exclusive brokerage services to Starr and Itasca Re, Castlelake said.
"Itasca Re is the latest step Castlelake has taken to strategically innovate and expand the financing solutions it can offer," said Joe McConnell, partner and deputy co-chief investment officer at Castlelake.
"With the experience and expertise of the Itasca Re team and partnerships with established market participants, we believe Itasca Re will quickly become a go-to solution provider for global airlines and the broader aviation market," said Armin Rothauser, partner, asset-backed direct lending.
Castlelake describes itself as "global alternative investment manager specialising in asset-backed private credit with 17 years of experience investing in, financing and managing aviation assets" and has invested over US $17bn in aviation opportunities, acquired more than 650 aircraft and developed relationships with approximately 200 airlines.