Deucalion Aviation Limited, a U.K.-based joint venture managed by asset management firm EnTrust Global and investment firm Strategic Value Partners LLC, has entered into an agreement for an undisclosed amount to acquire Germany-based DVB Bank’s Aviation Investment and Asset Management business in a deal set to close in the first half of this year.
The portfolio currently managed by the DVB Aviation Investment and Asset Management business includes 160 aircraft on lease to eighty carriers, and represents nearly $5 billion in asset value, according to a joint press release.
While it is too early to tell how the new investors will manage the aircraft portfolio, the acquisition may offer opportunities for freighter conversions, should market conditions warrant them.
David Yu, chairman of Aviation Valuation Advisors, told Cargo Facts that the portfolio’s aircraft types, which mainly consist of narrowbody aircraft, including 737NGs and A320-family aircraft, “would be viable for cargo conversion.”
However, since the managed aircraft are owned by other investors and not Deucalion itself, conversion decisions will depend on investor appetite. Given the ownership dynamic, selling the aircraft as feedstock to other entities involved in cargo conversions would likely be the most straightforward approach, “unless investors want into the conversion business,” said Yu.
Deucalion did not respond to a request for comment.
Mitsubishi UFJ Financial Group (MUFG) had previously planned to acquire DVB’s asset management arm but was forced to abandon those plans after failing to receive approval from U.S. authorities. However, MUFG successfully completed the acquisition of DVB’s Aviation Finance lending business in November 2019.
This development coincides with other recent mergers and acquisitions within the aircraft management and leasing spheres. Last week, GE announced a merger of GE Capital Aviation Services and AerCap Holdings, a deal worth over $30 billion.
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