• Partners Group has invested USD 250 million as the sole lead investor in a continuation vehicle established by Avenue Capital Group
• The Portfolio, which consists of 69 aviation projects assembled over the past decade, is highly diversified and underpinned by contracted cash flows
• The commercial aviation leasing market benefits from several tailwinds, including a structural undersupply of new aircraft

Partners Group, one of the largest firms in the global private markets industry, acting on behalf of its clients, and Avenue Capital Group, a global investment firm, today announced that Partners Group's infrastructure secondaries strategy has invested USD 250 million in Avenue Capital Group's global commercial aviation leasing portfolio ("the Portfolio"). Partners Group's investment is one of the largest transportation transactions by its infrastructure secondaries strategy to-date.

Partners Group is the sole lead investor in an approximately USD 360 million multi-asset continuation vehicle that was established by Avenue Capital Group to acquire the Portfolio. Avenue Capital Group's aviation team will continue to manage the assets.

The Portfolio consists of 69 mid-life aviation projects across narrowbody aircraft, widebody aircraft, and regional jets. The lessee base is diversified across 30 airlines spanning multiple geographies, including Asia, Western Europe, and North America. The majority of cash flows from the Portfolio are contracted, providing stable and predictable income. The Portfolio is also structured to maximize the asset values of aircraft at the end of contracts, either via re-leases, aircraft sales or aircraft disassembly.

The commercial aviation leasing market benefits from several tailwinds including a structural undersupply of new aircraft due to production delays, which is shifting industry dependence to mid-life aircraft and spare parts. In addition, aircraft engines are increasingly being used for alternative industrial uses, which is underpinning demand for legacy engines, supporting residual values and tightening broader supply dynamics.

Jeremy Semble, Head of Infrastructure Partnership Investments Americas, Partners Group, says: "Aircraft leasing is a growing space within the infrastructure asset class. The Portfolio is asset-heavy with contracted cash flows and high barriers to entry, reflecting significant capex requirements and maintenance needs. This makes it a great fit for our infrastructure secondaries strategy, where we look to provide investors with diversified exposure to sectors with resilient demand and strong growth potential. We are pleased to partner once again with Avenue Capital Group, which has positioned the Portfolio well in the current market environment."

Marc Lasry, Co-Founder and CEO, Avenue Capital Group, says: "This new continuation vehicle provided our existing limited partners with a compelling liquidity option and has allowed us to once again partner with Partners Group via a continuation vehicle, providing them with exposure to our strong portfolio of aviation projects that we have assembled over the past decade. Our Aviation team, led by Shawn Foley, Senior Portfolio Manager, looks forward to continuing to realize the value of the projects in the Avenue Kite Continuation Fund LP in a favorable market environment for such assets."

Partners Group’s Infrastructure Partnership Investments business focuses on LP-led portfolios, GP-led investments, and complex situations globally across high conviction themes. Partners Group has completed over 70 infrastructure secondaries transactions since 2006. The firm is currently raising its latest infrastructure secondaries program, which includes a closed-end fund and mandates that will invest alongside. 

Partners Group was advised by Ropes & Gray on the transaction. Avenue Capital Group was advised by Latham & Watkins and Perella Weinberg Partners.