large corporations inevitably result in the loss of top management. The merger
between AerCap And GECAS was no exception. Following the successful closure of
the largest merger in aviation leasing history, several ex-GECAS and former PK
Airfinance individuals – although awash with offers in the hot leasing market
to join new companies and enhance senior teams of competitor lessors – opted to
join together to form an entirely new lessor and lending platform.
Greg Conlon has formed High Ridge Aviation with 12 founding partners and
investor PIMCO to capitalise on the current demand for leased aircraft. Conlon
and the entire team recognise that the aircraft leasing market is leaning more
toward managing assets rather than owning aircraft. “Our market is moving away from a balance
sheet model towards a managed money model,” explains Conlon. “The ability for
one company to efficiently own billions of dollars of aviation exposure on its
balance sheet is becoming increasingly difficult.” High Ridge Aviation is an
asset management platform populated by highly experienced aviation personnel,
which also incorporates a new lending arm LR AirFinance.
“We have brought together people that know the assets, that know the
customers, and who know the market and can manage these specialised assets from
cradle-to-grave,” says Conlon. “Teaming those experienced asset managers with
institutional investors with access to a wide variety of capital sources is
where the market is going. That way, you can scale if you need to scale, and
size doesn’t become a limiting factor in terms of market opportunities.”
With backing from long-time aviation investor PIMCO, High Ridge Aviation
will not be limited by size due to capital constraints. With the addition of
the new lending platform, LR AirFinance, the team now has an additional layer
to offer the aviation market.
“In addition to High Ridge Aviation originating traditional operating and
finance leases, we also wanted the ability to provide debt,” explains Conlon.
For many years, GECAS and PK Airfinance operated in tandem to serve the
market with operating leases and sources of debt and equity capital. High Ridge
Aviation and LR AirFinance seeks to evolve a similar kind of partnership
platform to better serve the needs of today’s aviation market clients. “A
lending platform needs a specialized capital structure that is geared for
secured debt returns,” says Conlon. “It needs to be flexible in tenor and risk
adjusted appetite. As we considered potential partners, we knew that PIMCO was
the best choice– it was kind of a natural fit.”
High Ridge and LR AirFinance intend to capitalise on the many investment
opportunities created by the volatility caused by the pandemic and the recovery
environment. Timing is everything for new businesses. Downturns are often the
most ideal time for start-up entities to find unique opportunities to provide
value and generate highest returns.