GIC joins Avolon PE team with $300m investment

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.