Avolon creates new aircraft leasing platform with ADIA, I Squared Capital

Avolon Unveils New $1.4B Aircraft Leasing Platform with ADIA, I Squared Capital

Major Joint Venture Launch in Aircraft Leasing Industry

(Refiles to add dropped title 'I Squared Capital' to seventh paragraph)

Details of the New Investment Platform

DUBLIN, Nov 2 (Reuters) - Global aircraft leasing giant Avolon on Monday announced a new investment platform with I Squared Capital and a subsidiary of the Abu Dhabi Investment Authority (ADIA) expected to initially comprise 22 of the lessor's aircraft valued at $1.4 billion.

Purpose and Structure of Constellation Aviation

Dublin-based Avolon, the world's third-biggest aircraft lessor, said the new joint venture, Constellation Aviation, would provide airlines with access to fleet capacity while giving investors exposure to long-term contracted cash flows.

Market Context and Avolon's Position

Aircraft lessors own around half of the world's airline fleet that are in hot demand due to a backlog of plane orders. Avolon agreed its largest ever aircraft order last month, bringing its total number on order to 749, on top of 561 it currently owns.

Portfolio Details and Growth Ambitions

Seed Portfolio Composition

The $1.4 billion seed portfolio comprises 22 aircraft to be acquired from Avolon with an average age of around five years and leased to 17 airlines in 15 countries, Avolon said.

Management and Scaling Strategy

Avolon, a subsidiary of China's Bohai Leasing Co Ltd, will retain a minority equity interest and serve as Constellation's exclusive aircraft manager and servicer as the platform scales up over time.

Future Growth Plans

A source familiar with the platform said its ambition was to grow the size of the portfolio to $6 billion.

Key Partners and Industry Comparisons

About ADIA and I Squared Capital

ADIA, one of the world's largest sovereign wealth funds, is the oldest of Abu Dhabi's three major government-controlled funds that invests on behalf of the emirate's government. Miami-headquartered infrastructure investor I Squared Capital manages over $60 billion in assets.

Industry Benchmark: SMBC Aviation Capital Deal

The world's number-two lessor, SMBC Aviation Capital, struck a deal last year that also shared the risk of acquiring U.S.-based rival Air Lease Corp for $7.4 billion with a group of investors via a newly established entity.

Reporting Credits

(Reporting by Padraic Halpin, editing by Sam Tabahriti)