Samsung Partners has newly launched an independent investment firm, called Samsung Aviation Partners, to focus on global aviation investment and is creating a fully-staffed, “real” leasing platform in Ireland, as well as a team within Korea, to provide innovative bespoke solutions to the aviation industry and to guide its Korean-based investors. Locally based expertise is key to our strategy.
Samsung’s aim is to differentiate itself from other historical platforms in Korea, which have often invested on the basis of being able to meet the reward requirements during a first lease period. We are highly focused on future values and what happens after a first lease. We will manage the process directly even if we work with other managers. Our aim is to provide our investor clients with a full risk assessment and avoid any conflicts, utilizing third party managers in expensive and evergreen contracts with few rights.
The Korean investor market has been viewed as naive and taken advantage of. The Korean investor’s strategy of widebody aircraft to flag carriers has merits, but expensive and illiquid assets come with other risks if the airline customer does not extend and the exposure at lease end is high. Those investors who have participated in A380, 777 and A330 investments will likely pay a high price for the gains earned during the initial contracted lease. Many Korean investors will lose substantial equity having invested in illiquid assets. They have failed to understand the strategies of the airlines they have worked with; even when those airlines have been top-tier carriers. A first lease is easy to achieve and providing an estimated appraised value for lease end makes any model appear to work on paper. Appraisals are not bankable guarantees and Korean investors are learning the hard way that appraisals can be inaccurate.
We will not rely on the services of third parties without oversight and ultimate decision-making authority and aim to source our own assets directly with suppliers. Korean investors have been too trusting and distanced from the management of assets, ultimately paying high fees and having little control, especially when market dynamics change.
We aim to bring down the cost and change the strategy of Korean investors. We will do this by leveraging a wealth of industry experience, pipelines and extensive networks to source all forms of aircraft investment opportunities, find bespoke solutions, raise capital, and ultimately maximize values for all key parties. Institutional investors and Korean banks will benefit from our aircraft sourcing competencies that will match their unique investment appetites with the right aircraft transactions.
We aim to render high quality investment opportunities, including Operating and Financing Lease, Senior, Mezzanine and Equity Financing, PDP Financing, Sales and Leaseback transactions, Freighter Conversion Program and etc. on terms that will benefit both our airline customers and our investors.