Global financial services firm Aura Group has reached the first close of Aura Aviation Fund 1 (AAF1), the first of a new series of aircraft and engine investment vehicles for institutional and private investors in the Asia Pacific region.
The new fund already completed its first investment by acquiring a structured majority interest in one Boeing 737-800 aircraft leased to a subsidiary of TUI AG, a European hospitality business with a market capitalisation of 5 billion euros ($5.53 billion), according to a recent statement.
The company did not disclose the fundraising size in the initial close, but as an indication – the asset value of a Boeing 737-800 aircraft is worth about $20 million to $30 million.
The fund targets a USD cash yield of 9 per cent per annum payable monthly with a total net return of 11.9 per cent IRR (net of fees).
“The Boeing 737-800 has historically been and continues to be a very strong leasing asset, with extremely high utilisation rates globally. With a typical service life of up to 25-30 years, this asset type is extensively deployed across the world,” said Aura director Andrew Nai in the statement.
He continued: “Global air passenger traffic is expected to be on a firm long-term growth trend, with fleets globally to double in the next 20 years underpinned by 4.4 per cent compound annual growth rate (CAGR) air traffic growth into 2036. In particular, the Asia Pacific region is set to be one of the highest growth markets for air travel.”
Aura Group, established in 2009, is specialized in wealth and funds management and corporate advisory with operations in Singapore, Sydney, Melbourne, Brisbane, Ho Chi Minh City and Bangkok. The company expanded into Hong Kong in the fourth quarter of 2019.