· The management team has built a global, diversified portfolio, with exposure to four aircraft models, highly differentiated geographies, and top-tier airlines.
· After analysing more than 100 potential deals, the strategy has been focused on reaching agreements with airlines with clear government support or with greater exposure to domestic traffic.
· The average age of the fleet is four years and includes some of the most efficient models on the market, such as the Airbus A321 LR Neo and the Boeing 787 Dreamliner.
· The recovery trend in air traffic following the pandemic has helped the fund's NAV to rise by approximately 12% at its first valuation.
· The fund will make its first distribution to unitholders in the coming weeks.
· The Dunas Real Assets team is working to launch its second commercial aircraft-focused fund, which will follow a similar strategy.
Madrid, July 5th, 2022. Dunas Capital, an independent real estate and asset management platform, has announced that it has invested 100% of the €104 million raised by its Dunas Aviation I FCR and Dunas Capital Aviation SCR vehicles, with which it has created a diversified portfolio of 12 commercial aircraft with a value of approximately USD400 million. This is the first fund focused on this type of asset class that has been ever marketed in Spain.
Dunas Capital launched these innovative private capital vehicles in January 2020, before the COVID-19 crisis, with the objective of investing in commercial aircraft on long-term lease to first tier airlines. The fund's investor base comprises both institutional (insurance companies, pension funds, mutual funds, provident societies, etc.) as well as private investors, after the Dunas Capital Group reached an exclusive distribution agreement with a leading private banking network.
After analysing more than 100 potential deals during 2020 and 2021, the management team made five investments between March and November 2021, once clear recovery trends in the sector were identified.
The fund’s investment strategy focused on reaching agreements with airlines with clear government support and those with greater exposure to domestic traffic, a segment that has recovered much faster than international traffic and has already reached near pre-pandemic levels in many geographies. As a result, the NAV of the vehicle has risen by approximately 12% in its first valuation and a first distribution to investors will be made in the coming weeks. Currently, the average age of the fleet is four years and includes several of the most efficient models on the market.
As part of the strategy of reaching agreements with government-supported airlines, two deals were closed with the Portuguese airline TAP for two Airbus A321 LR Neo and one with Qatar Airways for a Boeing 787 Dreamliner. On the other hand, as part of the deals with airlines focused on domestic traffic, the management team chose to invest in two Airbus A220-100 for the U.S. based carrier Delta Airlines and seven A321s for Cebu Pacific, the Philippine leader in domestic traffic between the country's islands. In this way, the management team has succeeded in building a global, diversified portfolio with exposure to four aircraft models, four highly differentiated geographies and four top-tier airlines.
The Dunas Capital Real Assets team, led by Gregorio Herrera, acted as an investment advisor. In addition, legal and tax advice has been provided by KPMG Lawyers, Watson Farley & Williams, DWF RCD and Walkers Global. Arena Aviation Capital acted as advisor and technical manager of the transactions. International Bureau of Aviation acted as specialised consultant to the fund.
After the good results achieved with its first commercial aircraft-focused fund, Dunas Capital has already started to prepare the launch of a second fund that will follow a similar strategy, paying special attention to ESG criteria, keeping the focus on diversification and good credits, and without leaving aside the focus on the most versatile and liquid assets.
David Angulo, Chairman of Dunas Capital, stated: "The excellent results achieved so far by Dunas Aviation fund I reaffirm us in our growth strategy in the alternative assets space as a complement to the portfolio of innovative and quality products that we offer to our clients."
Miguel Cacho, head of alternative investments at Dunas Capital Asset Management, said: "The aviation sector, that suffered one of the hardest hits in the wake of the pandemic, is starting to show clear signs of recovery. This proves again that excellent investment opportunities can be found in all market scenarios when the focus remains on long-term value creation."
Borja Fernandez-Galiano, Head of Sales at Dunas Capital, added: "This product generates stable returns over the long term, with low volatile underlying assets, and a large decorrelation component for our clients' portfolios. All in all, we are confident that the upcoming launch of our second commercial aircraft-focused fund will once again be a success."