Arcano Partners closes first aviation transaction

Editor -
  • Arcano Aviation Fund, FCR, and Arcano Aviation, SCR both managed by Arcano Capital SGIIC, SAU, (“Arcano Partners”) have completed their first investment in 1x Boeing 777-300ER leased to Air Canada
  • The aircraft, already in the airline’s fleet and in operation, will be leased for 56 months, and the airline will then acquire the asset at the end of the lease
  • The aviation sector has surged strongly, and it is expected to reach the historic high of 5bn passengers by the end of 2024

Madrid, October 1st 2024.- Arcano Partners, the independent asset management and investment banking firm in Spain, has announced the closing of the first transaction of Arcano Aviation Fund, FCR, and Arcano Aviation, SCR with the acquisition of 1x Boeing 777-300ER on lease to Air Canada an aircraft already in the airline’s fleet. This transaction means a very significant milestone for this strategy proving the team’s capacity to origin and execute transactions in the aviation sector. The financing was provided by Investec Bank, plc and Arena Aviation Capital (Ireland) Ltd will be the Lease Manager on behalf of Arcano.

The Boeing 777, which is one of the largest aircraft in the world with more than 1.500 aircraft delivered and more than 500 units on order, will be leased for 56 months when the airline will acquire the asset.

Investing in a resilient sector

Arcano’s aviation strategy is focused on investing in transportation real assets leased to strong counterparties on a long-term basis. The lease contracts generate very stable and predictable cash flows uncorrelated to other traditional assets whilst improving portfolio’s diversification.

The aviation sector has surged strongly from the COVID-19 pandemic reaching the pre-pandemic traffic level in October 2023. International Air Transport Association (IATA) expects global passenger traffic to reach 5bn in 2024, the historic high. 

Current supply chain issues are resulting in an offer-demand imbalance that will very likely last until the end of the current decade. This context is strengthening asset’s residual values which improves the collateral guarantee for investors in these transactions. Investing in aviation assets keeps being of interest for international investors that appreciate (i) the long term contracted cash flows coming from the leases, (ii) low volatility, (iii) the uncorrelation to other traditional investments y (iv) protection against inflation that these assets provide.

"We are very excited to announce what is a very relevant milestone for Arcano Partners. The acquisition of this Boeing 777-300ER with a top-tier client like Air Canada highlights our ability to find interesting opportunities in this sector,” said Jon Garaiyurrebaso, Managing Partner of Arcano Asset & Capital Finance (ARCANO's advisor for this strategy) 

Miguel Cacho, Managing Director at ARCANO said “the solid recovery of the sector, the imbalance between supply and demand and the fall in interest rates offer an increasingly favourable environment for investment. This asset class has been in the portfolios of American, European and Asian investors for a long time now, with a very resilient performance in the face of adverse effects.  This is only the first step in our ambitious agenda, as we expect to continue adding investments to our portfolio before the end of this year.”

Clayton Woollgar of Investec commented "We are proud to have added Arcano as new client of the bank and to have supported their team on this significant transaction for their new fund. We look forward to many more transactions with them in the future."