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Aviation Finance Firm Buzzes Family Offices For Capital

An aviation finance firm that gets the vast majority of its backing from family offices is seeking a further funding injection.
Shearwater
Aero Capital, a corporate aviation specialist, wants to tap
family offices as the kind of investors from which it wants to
raise up $100 million for future growth.
Family offices are more likely than other types of private
investor to put money into the aviation sector, Shearwater said,
as it trumpeted its double-digit percentage returns on aviation
finance transactions.
The organisation’s funding drive comes at a time when family
offices’ own use of private aircraft has in some ways become more
challenging in certain regions, such as the US, because of
regulatory costs, taxes and a squeeze on supply of qualified
pilots. (To see an analysis of the US private aviation market and
family offices,
see here.)
“Shearwater’s transactions offer excellent fixed income
performance with structures that have a time-tested record of
mitigating downside risk. Our investors have shown increasing
appetite for these investments’ characteristics. A growing desire
from family offices and other investors to diversify their
portfolios, and the attractive returns offered by the private
debt market through opportunities such as ours, means more
investors are looking to increase their exposure here,” Chris
Miller, managing partner, Shearwater Aero Capital, said.
The firm was launched in 2014 and it says family offices provide
the “vast majority” - 90 per cent - of funding for its
deals, it said. Shearwater’s deals and have received an average
return on investment of between 13 per cent and 15 per cent, with
no losses. Funding is relatively low risk with an average loan to
value of 65 per cent.
The firm said it has provided funding for more than $100 million
in aircraft.
See an article on aviation finance from a practitioner in the space here.