Partners Group, a global private markets firm, has invested USD 250 million as the sole lead investor in a continuation vehicle established by Avenue Capital Group to acquire its global commercial aviation leasing portfolio. The approximately USD 360 million multi-asset vehicle, known as the Avenue Kite Continuation Fund LP, will be managed by Avenue Capital Group's aviation team. This transaction is one of the largest transportation deals by Partners Group's infrastructure secondaries strategy to date.
The portfolio comprises 69 mid-life aviation projects, including narrowbody aircraft, widebody aircraft, and regional jets. Its lessee base spans 30 airlines across Asia, Western Europe, and North America, providing geographic diversification. According to the announcement, the majority of cash flows from the portfolio are contracted, offering stable and predictable income. The portfolio is also structured to maximize asset values at contract end through re-leases, aircraft sales, or disassembly.
Jeremy Semble, Head of Infrastructure Partnership Investments Americas at Partners Group, stated: "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." He emphasized that the investment fits Partners Group's infrastructure secondaries strategy, which seeks diversified exposure to sectors with resilient demand and growth potential.
The commercial aviation leasing market benefits from several tailwinds, including a structural undersupply of new aircraft due to production delays, which shifts industry dependence to mid-life aircraft and spare parts. Additionally, aircraft engines are increasingly used for alternative industrial applications, supporting demand for legacy engines and tightening supply dynamics.
Marc Lasry, Co-Founder and CEO of Avenue Capital Group, noted: "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." He added that the aviation team, led by Senior Portfolio Manager Shawn Foley, looks forward to realizing value in a favorable market environment.
Partners Group's Infrastructure Partnership Investments business focuses on LP-led portfolios, GP-led investments, and complex situations globally. The firm has completed over 70 infrastructure secondaries transactions since 2006 and is currently raising its latest infrastructure secondaries program. Partners Group was advised by Ropes & Gray, while Avenue Capital Group was advised by Latham & Watkins and Perella Weinberg Partners.
This investment underscores the growing appeal of aircraft leasing as an infrastructure asset class, offering contracted cash flows and inflation-linked returns. For investors, it provides exposure to a sector with structural tailwinds and limited new supply, potentially enhancing portfolio diversification.
