Business jet financing group Global Jet Capital last month agreed to purchase the aircraft lease and loan portfolio of GE Capital Corporate Aircraft in the Americas, representing approximately $2.5 billion of assets. Ahead of this year’s NBAA show, the company has been dealing with the complex process of closing the deal, which should be complete by early January. The process involves transferring ownership of some 350 aircraft registered in a variety of jurisdictions.
Global Jet Capital was launched 12 months ago at the 2014 NBAA show. Executive director Shawn Vick explained that the original business plan had been to focus on building the company’s leasing portfolio organically (i.e. through new sales). Before the announcement that GE planned to dispose of its leasing arm, it signaled its willingness to take on the corporate aircraft division, and discussions to this end began in January 2015.
Without knowing exactly what parts of the GE Capital team would come across with the transaction, Global Jet Capital held off on expanding its own team. But on learning that GE had downscaled its team, the company has since been actively recruiting.
“There is no doubt that this deal gets us our business up to scale in one very quick move,” Vick told AIN. “It takes Global Jet Capital from being viewed as a start-up to being a substantial presence in the market.”
Another part of Global Jet Capital’s plan that has changed is the scope of the sort of aircraft it is looking to handle. Initially, the focus had been squarely on larger, longer-range jets, but with the GE Capital portfolio in hand, Vick said it is broadening this scope to include almost any “high-quality airplanes with good credit and in jurisdictions where we should be doing business.”
According to Vick, the company is working with several customers who are looking to upgrade existing aircraft. “Our mandate has definitely changed [with the acquisition of GE Capital Corporate Aircraft] and we are now willing to look at airplanes outside our original plan,” he said.
Despite new uncertainties in international markets, Vick said Global Jet Capital remains optimistic about prospects for further expanding its lease portfolio. He said that the group currently has a further $1 billion in funds available to support transactions. “Manufacturers will continue to deliver between $12- and $15 billion worth of aircraft per year and the vast majority of these end up being financed, so this is a sizable market opportunity,” he commented.
Global Jet Capital (Booth C10016) is capitalized by three global investment firms: GSO Capital Partners, a Blackstone company in partnership with Franklin Square Capital Partners; The Carlyle Group; and AE Industrial Partners. The company's current management team and executive committee include leaders from business jet manufacturers, maintenance and service providers and leading financial institutions that have served the private aircraft industry for a combined 200-plus years and have completed more than 3,500 aircrafttransactions.
The U.S.-based company offers a range of operating and interim leases, finance leases and mortgage loans, progress payments and mezzanine financing (a mix of debt and equity financing) for both new and previously owned business jets. Its target market is aircraft valued at $30 million and higher, including pre-owned aircraft around three to five years old.
In addition to Vick, who has formerly held senior positions with various companies including Hawker Beechcraft, Gulfstream and Bombardier, the Global Jet Capital management team includes executive director Bill Boisture, formerly with Hawker Beechcraft, Gulfstream and NetJets. Also on the committee is David Rowe, founder and managing partner at AE Industrial Partners and formerly an executive vice president with Gulfstream Financial Services and GE Capital.
“We see an opportunity in the market because the traditional sources of financing such as the banks [have taken] a step back, and others have placed significant hurdles in the lending process, so the provision of lease financing or debt financing has proved to be challenging,” Vicksaid.