Fast growing Shearwater Aero Capital, a global corporate aviation finance specialist, is looking to raise up to USD100 million to support its growth, following its strongest performance ever in 2018.
Since Shearwater’s launch in late 2014, the Company has been providing finance solutions for all types of aircraft. Family offices have provided the vast majority of funding for Shearwater’s deals and have received an average Return on Investment (ROI) of between 13 per cent and 15 per cent, with no losses. Funding is relatively low risk with an average loan to value of 65 per cent. As added investment security, all financed aircraft are independently operated by third parties unrelated to the obligor, so in the event of a default Shearwater can quickly repossess and liquidate the aircraft to satisfy outstanding balances.
To date, Shearwater has provided funding for over USD100 million in aircraft. It has provided loans and finance leases on 15 business aircraft around the world, including the US, Europe, Asia, the Middle East and Africa. Around 90 per cent of its funding has come from family offices.
Chris Miller, Managing Partner, Shearwater Aero Capital, says: “Shearwater’s transactions offer excellent fixed income performance with structures that have a time-tested record of mitigating downside risk. Our investors have shown increasing appetite for these investments’ characteristics. A growing desire from family offices and other investors to diversify their portfolios, and the attractive returns offered by the private debt market through opportunities such as ours, means more investors are looking to increase their exposure here.”
“With regards to family offices, they have as much as 10.7 per cent of their assets invested in this asset class, compared to an average of around 4.7 per cent for the average private debt investor (1). This difference can partly be explained by the fact that family offices are less tightly regulated and are not as concerned about secondary market liquidity as other investors.
“We are seeing growing interest from family offices from around the world that are looking to help fund our business, and with more of these institutions being launched, we expect this trend to continue.”
2018 was Shearwater’s strongest yet accounting for 60 per cent of the Company’s business since its launch in 2014. Last year, its average loan size was approximately USD7 million. It has provided loans from USD1.5 million to USD15 million for a range of aircraft from a Hawker 400 XP to a Bombardier Global 5000. Its average loan to value is 65 per cent.