US firm raises $595m aviation fund(2)

Apollo Aviation Group, which invests exclusively in aircrafts and airplane components, has more than doubled the size of its debut fund that closed in 2010.

Miami-based asset manager Apollo Aviation Group has held a final close on $595 million for its second aviation fund, exceeding the fund's $500 million target.

The fund, Sciens Aviation Special Opportunities Investment Fund II, takes its name from New York-based asset manager Sciens Capital Management, a part owner of Apollo Aviation. SASOF II is a follow-on fund to Apollo’s debut institutional fund, which collected $213 million in 2010.

Apollo Aviation purchases airplanes that have been in operation for between eight and 20 years.

“We monetise the retirement of those airplanes by disassembling them and selling the parts,” Apollo Aviation managing director David Treitel told Private Equity International.

Apollo Aviation came to market with Fund II in the fall of 2011 and attracted commitments from a variety of institutional investors. While the fund is more than double the size of Apollo Aviation’s debut fund, the firm will invest using the same strategy, but has extended the investment period from one year to two years. Fund I is fully invested and has begun returning capital to LPs. Fund II has acquired 12 commercial aircraft and three engines.

“We’re very excited about the investment opportunities,” Treitel said. “We think that the underlying market for our type of investing activity is trending to really favour the strategy that the fund is implementing.”

Founded in 2002 as a small advisory firm to a single aviation manager, Apollo Aviation Group started managing capital as an asset manager in 2004, evolving from “managed account type of activity”, according to Treitel, to a blind pool investment strategy. The firm has additional offices is London, Dublin and Singapore, and more than $1.4 billion of aviation assets under management.