Macquarie’s aircraft leasing business will add more long-term investors as it transforms into an off-balance sheet asset manager chasing fees, Chief Executive Officer Shemara Wikramanayake said.
Dutch fund PGGM took a 25% stake in Macquarie AirFinance (MAF) in May. At Macquarie Group’s 1H 2020 results briefing in Sydney today, Wikramanayake said it would add more investors that will likely see its holding fall below 50%.
She wouldn’t comment on the timing of new investments or the returns the investors are expecting, but said further stakes are likely to be taken up by a few long-term, institutional investors as the lease contracts are “long-dated assets”, despite the volatility of airlines’ earnings and changes that can occur in their credit rating.
“Initially I don’t think we will have a big group of investors. It will depend on the opportunities to invest,” she said in response to a question at the results briefing. “We have PGGM in there. I imagine we will step down [from 75%] to [owning] less than half of that [business].”
“We are seeing a lot of [potential] to invest in the aircraft space. We have a capability to invest beyond the balance sheet. We brought in PGGM and our intention is to bring a couple of other investors in alongside as us,” she earlier told analysts.