Private Equity News & Analysis

GIC joins Avolon PE team with $300m investment

Sovereign wealth fund GIC has reportedly invested $300m in an aircraft leasing company owned by Cinven, CVC and Oak Hill.

By
Clare Burrows
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Sovereign wealth fund GIC has reportedly invested $300m in an aircraft leasing company owned by Cinven, CVC and Oak Hill.

The Government of Singapore Investment Corporation has become the latest investor to buy into the aircraft leasing sector, reportedly investing $300 million for a stake in private equity-owned Avolon.

GIC’s $300 million investment in Dublin-based Avolon adds another high profile name to the company’s shareholder list and gives it a substantial stake alongside private equity firms Cinven, CVC Capital Partners and Oak Hill Capital Partners.

Avolon runs a fleet of 88 aircrafts in 18 countries worth more than $4 billion, according to media reports. The business’ primary focus is on newer, fuel-efficient, single-aisle aircraft such as the Airbus A320 family.  Last month Avalon signed a deal to lease nine Boeing and Airbus aircrafts to low-cost carriers Ryanair and AirAsia. It also announced it had increased its committed debt facilities by $600 million, taking the figure to $2.6 billion.

GIC and Avolon were both unavailable for comment. 

GIC has $300 billion of assets under management, and currently commits 10 percent to private equity. It is an LP in the $2.5 billion Oak Hill Capital Partners II, with a commitment, according to Private Equity Connect.

The deal is further evidence of the aerospace sector as a growing investment area for private equity firm and large investors. Private equity firm Terra Firma Capital Partners and the Canada Pension Plan Investment Board led a consortium of investors in increasing their stakes in another Dublin-based aircraft leasing group, AWAS. In March 2011, Terra Firma’s full investment reached $1.2 billion for 60 percent of the business, with CPPIB holding a 25 percent stake.