Castlelake has launched Merit AirFinance, its new aviation lending entity, on August 12, 2025. The new business will provide debt capital to airlines and lessors for new and used aviation assets.
Merit AirFinance seeks to provide separation between Castlelake's leasing and lending offerings as a new operating subsidiary focussed on providing “flexible, innovative debt solutions" to airlines and lessors. Merit will build on Castlelake's aviation lending activity, having deployed over $5bn to airlines and lessors since 2020.
The business will have its own separate office space along with a dedicated origination team. Patrick Mahoney will transition from Castlelake's aviation capital markets function to lead Merit as its president. He will leverage his experience in previous roles within Castlelake's aviation underwriting, asset-based direct lending teams and aviation capital markets teams to lead Merit's strategy.
In addition, Castlelake will add Jakob Gallagher to succeed Mahoney's former role, leading Castlelake's aviation capital markets function. Gallagher has 13 years of experience in aviation capital markets and financing. He recently served as head of capital markets at Wings Capital Partners.
"Castlelake has continuously innovated to provide the aviation market with flexible solutions across all aviation assets and the capital stack, and the formation of Merit AirFinance exemplifies this commitment to a solutions-oriented partnership approach,” said Evan Carruthers, CEO and chief investment officer of Castlelake. “We believe that this approach is valuable to both aviation industry participants and our investors and that it enables us to create more opportunities to match capital with attractive risk-adjusted aviation exposure.”
Merit launches with the ability to deploy over $1.8bn of committed capital via separately managed accounts.