HSH Nordbank launches first aircraft leasing fund
New, innovative offering for institutional clients
Hamburg/Kiel, June 12, 2007 - HSH Nordbank AG will, for the first time, launch a closed-end aircraft leasing fund on the market. With the HSH Global Aircraft Fund I, institutional investors will now have access to the growth market of aviation, which is forecast to record very dynamic rates of growth over the next two decades. The aircraft fleet assembled using the fund capital consists of between 25 and 30 machines that are leased to airlines. The fund’s volume totals USD 1.3 billion.
“With the aircraft leasing fund we have broadened our portfolio to include an innovative and promising product for institutional investor groups. As a proven specialist in international transportation finance we are creating the conditions for attractive gains in value and promising exit opportunities,” said Peter Rieck, Deputy CEO of HSH Nordbank.
The HSH Global Aircraft Fund I targets international banks, pension funds, insurance companies and private equity firms. Moreover, HSH Nordbank itself holds approx. ten percent of the total investment and manages the product design, structuring as well as fund distribution.
Active portfolio management of the aircraft fleet is assumed by Amentum Capital, a subsidiary of HSH Nordbank and Deutsche Anlagen Leasing (DAL). Amentum has experienced aircraft specialists with proven expertise in the aircraft leasing business.
With a portfolio of five billion euros, HSH Nordbank is one of the top five providers of aircraft finance in the world. Peter Rieck: “We thus have excellent access to the market and the requisite knowledge in the asset management of aircraft, which we seek to use increasingly to develop equity-fund solutions.”
The aircraft fund has a unique product structure on the market: it invests in a newly-to-be-established young aircraft portfolio consisting of between 25 and 30 different types of globally deployable commercial aircraft, such as the A320 and the B737 NG, which are to be acquired through operating leases. By spreading the funds over different types of aircraft and by signing leasing agreements with different airlines and terms, the safety of the investment is increased significantly. The fund’s investment phase is three years, with 25 percent of assets identified already.
Moreover, various exit scenarios increase the return prospects. For instance, following the expiry of the fund’s planned term of between six and ten years, individual aircraft or entire blocks of aircraft might be sold. All told, an IRR (internal rate of return) of between ten and twelve percent is projected for institutional investors.
The timing for an entry into the market is good. According to forecasts, demand for passenger and cargo aircraft is set to more than double by 2025. Over this period, an annual average of 1,500 new aircraft are due to be delivered. Almost 40% of the world's total fleet is leased - and the trend is up. “We consider the transportation market to have great opportunities for expansion,” commented Rieck. “Alongside finance solutions, we aim to structure and issue further innovative products for institutional clients in the future."
HSH Nordbank AG is a strong regional bank in Northern Europe with total assets of € 200 billion. Some 4,400 of the bank’s employees provide corporate and high net-worth clients around the globe with premium bank products and services. In its core region of Hamburg and Schleswig-Holstein, it is the market leader in the corporate customer segment. HSH Nordbank is an acknowledged partner of the capital markets and international sector specialist. Its main focus is on transportation and real estate. In fact, HSH Nordbank is the world’s largest provider of ship finance and covers the entire value chain in the transportation segment. In the area of real estate, HSH Nordbank is one of the strongest banks in Germany, acting as a provider of services relating to all aspects of real estate. For more information please visit our website at www.hsh-nordbank.com.
The information contained in this press release does not constitute an offer for the sale of any type of Hamburg Commercial Bank AG securities. Securities of Hamburg Commercial Bank AG may not be sold in the United States without registration pursuant to US securities legislation, unless such a sale takes place on the basis of relevant exceptional provisions.
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