SKY Leasing returns to the market with M&G equity fund

After selling its Irish subsidiary, Sky Aviation Leasing International (SALI) – which comprised a portfolio of 51 aircraft – to Goshawk Aviation in 2018, Sky Leasing (SKY) remained a full-service aircraft asset manager in the US, based in San Francisco, but it was only a matter of time before the team returned to the more active leasing market. And Sky Leasing has returned with a bang, closing its first aircraft leasing fund with a $300 million equity investment from M&G Investments (M&G). M&G is an asset manager, which until very recently was part of UK insurer, Prudential UK. M&G Plc is now listed as an independent company on the London Stock Exchange and has £341 billion of assets under management.

M&G will also acquire a stake in SKY, to support the growth of its asset management platform including the launch of its Irish servicing operation and continued operations in San Francisco, California.

As servicer to the fund, SKY will focus on providing fleet solutions for its longstanding airline customers through the acquisition of current-generation and next-generation Boeing and Airbus aircraft.

“We are excited to launch this first aircraft fund with M&G, who supports our vision for the growing opportunity to provide capital and aircraft fleet solutions to our global airline customer network, in addition to providing liquidity in the aircraft trading market” said SKY Leasing Chief Executive Officer Austin Wiley. “We look forward to building a best-in-class portfolio with an initial target of $1 billion of Boeing and Airbus aircraft.”

The new capital commitment further builds on the company’s long-term focus of being a flexible capital provider and significant experience managing new, mid-life, and end-of-life aircraft. “Our philosophy has been that the technology replacement cycle is happening and we want to be an active participant, helping airlines have an exit plan for their current generation equipment and also to supply financing solutions for their new technology aircraft.”

For M&G, the exposure to the space gives the company an attractive asset class with long-term, stable returns. “The management team’s expertise will enable our clients to access an attractive asset class that produces long term cash flows and which is underpinned by strong fundamentals. This strategic partnership builds on our experience of investing in aircraft leasing through the ABS and

private debt markets, and is an example of how we can structure innovative investment solutions to benefit our clients,” says Alex Seddon, Co-Head of Private Credit, M&G Investments.