DR. PETERS GROUP. aviation

Transcription

1 DR. PETERS GROUP aviation

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3 CONTENT Introduction...04 Core Competencies...05 Market Leadership - Aviation...06 Dr. Peters Awards...07 Dr. Peters Aircraft Portfolio...08 Business Activities / Services...09 Dr. Peters Aviation Relevant Experience...11 Asset Information The Aircraft...13 Investing in the Aviation Industry...14 Team...16 Contacts...17 // 03

4 INTRODUCTION Dr. Peters Group Established in 1960 One of the oldest and largest initiators as well as managers of closed-end funds in Germany Headquarter in Dortmund, Germany 617 employees Total balance sheet 100+ million (excluding own asset investments) Own asset investments to an amount of US$ 300+ million Total investment volume US$ 8.85 billion Portfolio consists of 143 funds in aviation, shipping and real estate App. 100,000 private and institutional investors Aviation portfolio of 19 assets with a total investment volume of US$ 3.4 billion DS Aviation Established in 2008 Aviation asset manager for the Dr. Peters Group Team of 9 experts Full-service operating lessor Responsible for the sourcing and structuring as well as commercial and technical managment of aviation investments Proven experience from the identification of transactions through to the remarketing of assets Understanding the needs and requirements of investors, lenders and airlines Services to third parties by advising and supporting transactions // 04

5 CORE COMPETENCIES Reliable partner striving to reach the best possible win-win situation Primary aim to establish long term relationship with our partners Independent professional team always sensitive to the needs and requirements of partners Big enough to deal with the offered services yet Small enough to nurture individual relationships Strong network worldwide in debt sourcing allowing competitive pricing and customized structures Internationally experienced in setting up investment funds as Limited Partnership, IPO or AIF (Alternative Investment Funds) in different jurisdictions Flexible terms and conditions adapted to our partner s environment and situation Options for partners to participate in the transaction and benefit from equity structuring // 05

6 MARKET LEADERSHIP - AVIATION In Germany, the Dr. Peters Group is the leading initiator of closed-end aviation funds. Since the launch of the company s first aviation fund in 2007, an amount of 1.1 billion equity has been raised in total. In the market segment of German private investors, the group has raised million of equity in 2015 which was around half of the total equity volume placed in that year with German private investors. Market-Overview (in ) Retail Market for aircraft funds (Germany) Thereof Dr. Peters Group Source: Scope Analysis GmbH; Design: Dr. Peters Group In addition to its retail business, the Dr. Peters Group has successfully placed a multi-aircraft fund, DP Aircraft I, in the UK institutional market. DP Aircraft I initially launched in 2013 as an IPO and has invested more than US$$ 530 million into four Boeing B The Fund was placed with large UK institutional investors, amongst others Prudential, Baillie Gifford, CCLA Investment, Aberdeen, Kames Capital and AXA Investment Managers. The shares of the USD dominated fund trade around USD 1.10 (initial share price 1.00) underlining the confidence of the investor base in Dr. Peters Asset Management. These are further aspects, which highlights the success of the Dr. Peters Aviation Unit. In 2017 around 96,6 million of dividends had been paid out to investors of the Group s aviation portfolio. // 06

7 DR. PETERS AWARDS In the last few years, the Dr. Peters Group was able to gain different awards, amongst others in regard to sustainability, trade balance or as best closed-end-fund initiator in the aviation sector. These prices were awarded by different publishing houses and expert groups like Financial Times Germany / Feri EuroRating, FondsMedia GmbH or Fonds&Co. One of the critical factors of this success and key part of our strategy is the in-house asset management to protect the value of our assets under management. // 07

8 DR. PETERS AIRCRAFT PORTFOLIO The Dr. Peters aircraft portfolio currently comprises 19 narrow- and wide-body aircraft including Boeing 777, Boeing 787, Airbus A380 and Airbus A319 aircraft. The lessees are well-known airlines which operate in different countries and with different business models. The chart below shows all aircraft types and corresponding lessees. Aircraft type Airbus A Airbus A Boeing ER Boeing LR Boeing Boeing Airbus A Total Number Aircraft type Air France Singapore Airlines Emirates Emirates Norwegian Air Shuttle Thai Airways Virgin America/Alaska Airlines // 08

9 DR. PETERS AIRCRAFT PORTFOLIO // 09

10 BUSINESS ACTIVITIES / SERVICES DS Aviation is a full-service operating lessor with depth of experience across the whole value chain, from identifying transactions through to the remarketing of assets. This includes both commercial and technical asset management. For every transaction, four main sectors in the structuring and asset management process can be identified. Dr. Peters Aviation has the skill, knowledge, experience and resources to provide these services to the highest standard. Below, these services are briefly listed under the relevant sector. Investment Set-up Purchase, lease and loan negotiations Development of investment concepts including calculation scenarios Establishment of the investment strategy and criteria Setting-up of investment companies / vehicles Establishment of investment committees Preparing investor prospectuses according to the regulations of the respective market Investment Process Commercial and technical asset review Extensive market intelligence Due diligence and contract reviews Procurement of equity and debt Advisory of relevant boards Co-ordination of the investment process Custodian, central administrator and calculation agent duties // 10

11 BUSINESS ACTIVITIES / SERVICES Asset Management Ongoing communication with lessee, aircraft and engine manufacturers and regulatory authorities with regard to all technical and regulatory matters Overall technical oversight including documentation of aircraft, engines, other major parts, maintenance program, modifications etc. and general performance Monitoring of Airworthiness Directive ( AD ) and Service Bulletin ( SB ) compliance Verification and recording of relevant maintenance events Maintenance reserve management Distressed asset management Obtaining aircraft appraisals and insurance monitoring General asset, lessee and sector market review and advisory of operational trends and issues Preparation of asset monitoring reports, shareholder reports, presentations, and Interim Management Statements (IMS) Fund portfolio (risk) reporting Holding of supervisory board and investor meetings Business management of the fund company including accounting, fiscal issues and tax review Inspections/ Remarketing/ Transition Inspections (annual and redelivery) of the aircraft including standards of repair, maintenance and condition On-site presence during redelivery activities and any ensuing repair activities Verifying compliance of redelivery conditions On-site documentation review Remarketing of aircraft Negotiating of lease extensions Ferry, crewing and storage of aircraft Transition Management // 11

12 DR. PETERS AVIATION RELEVANT EXPERIENCE To further strengthen its in-house capabilities, DS Aviation formed in 2014 together with the UK-based aircraft lessor Skytech-AIC a joint venture company named DS Skytech Limited, to provide technical review and inspection management for the combined owned and managed aircraft portfolios. Beside the technical know-how and the profound understanding of the aviation finance and leasing market, it is Dr. Peters Aviation s involvement in different alternative investment structures which makes the company a perfect partner for any aviation related fund transaction, including those related to the new regulations applicable in Europe. A few of these different transactions are listed below: // 12

13 DR. PETERS AVIATION RELEVANT EXPERIENCE DR. PETERS FUND DS 140 (ONE A380 WITH AIR FRANCE) DS Aviation is acting as asset manager and adviser for the AIFM - Dr. Peters Asset Finance GmbH & Co. KG Kapitalverwaltungsgesellschaft ( Dr. Peters AF ), which obtained permission to operate as a fully regulated capital management company from the German Financial Supervisory Authority (BaFin). Together with Dr. Peters AF, DS Aviation was able to establish in 2014 the first fully regulated aircraft fund for retail customers in Germany under the new regulations. As a result of this transaction, DS Aviation is familiar with the new European AIF regulations and understands the needs and requirements of an AIFM. Furthermore the company was already able to gather day-to-day working experience in this new regulatory environment. DP AIRCRAFT I (CURRENTLY FOUR BOEING 787S LEASED TO NORWEGIAN AND THAI AIRWAYS) DS Aviation has established Guernsey based Leasing Company DP Aircraft I ( via an asset IPO in The equity was placed with institutional investors in the UK. DS Aviation is also acting as an asset manager and adviser for the firm and its board. In 2015, DS Aviation carried out a successful capital increase which doubled the size of the fund. Through this transaction DS Aviation gained experience with the establishment and the management of an investment product dedicated to large institutional investors. DS Aviation is also familiar with the reporting requirements of large institutional investors. GLOBAL AIRCRAFT FUND I Senior members of DS Aviation were intrinsically involved in the design, establishing and running of this successful multi asset aviation fund in prior positions within the HSH Nordbank Group. The Luxemburg based fund was set up to establish various SPV s who in turn each owned one or more aircraft assets. Beside a different investment focus (equity versus debt) the fund included features such as a semi blind pool character and an investment committee. REMARKETING - SUCCESSFUL LEASE EXTENSIONS DS Aviation, the asset manager for the Dr. Peters Group aviation division, is steadily reviewing market parameters and opportunities in order to achieve the best possible results in favour of the investors. This is proven by the successful extension of the lease contract for two Airbus A319 aircraft. The aircraft are leased to Virgin America who has signed to extend the initial lease of ten years by another five years. The leases will run until 2022 and 2023 respectively. In a difficult market environment for A380-Remarketing an interim solution could be achieved. Furthermore, a lease contract for one Boeing LR leased to Emirates had been extended beforehand. The initial leasing contract of ten years was extended by two years to November 2019 and then again by another six years. The leasing contract thus covers a total term of 18 years. Technical expertise, well established industry relationships and know-how regarding the operating lease environment are key in being successful in the aviation market. We make our profound knowledge available to both our airline customers as well as our investors creating a win-win situation. // 13

14 ASSET INFORMATION - THE AIRCRAFT Many factors influence the value chain of an aircraft asset and need to be monitored on a constant basis and adaptions implemented if applicable, to ensure that the asset keeps its value and functions. Some of these factors are as follows: Manufacturer Pricing strategy Production rate, run & cycles Market Economic conditions Airline profits Regulatory requirements Aircraft specifics Age Specification Aircraft variants Technology Operating economics Secondary market Maintenance condition Specific jurisdictional regulations Age restrictions One of the key factors which are controllable is the maintenance condition of an aircraft. There is a strong correlation between aircraft value and maintenance conditions and hence a lot of time and effort is invested to ensure that these conditions are and remain optimal. An Aircraft is an asset with an initial gradual loss of value however this is evened out over time with the collection of maintenance reserves. The value transfers from airframe to the engines over time and in the end, most of the value is left in the engines. Value Share 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Airframe Engine 0 20 Age of Aircraft Aircraft Value Share Transfer // 14

15 INVESTING IN THE AVIATION INDUSTRY Aicraft Leasing Aircraft purchase transactions have in the past been financed mainly by means of a loan secured by a mortgage or structured as a finance lease Today more and more transactions are financed by means of an operating lease. The operating lease can originate as a sale and lease transaction with the customer or by the lessor stepping directly into the purchase contract with the manufacturer Today 42% of all narrow body aircraft are financed via the operating lease model. This is expected to increase to over 50% in the next 10 years The basis of any operating lease is a lease agreement which allows the lessee to use the asset owned by the lessor for a specified period of time in exchange for a market related rental payment The rental payment is generally fixed and gives transparency to lessee s fleet management Generally, maintenance reserves are collected by the lessor dependent on the monthly utilisation of the lessee. In certain circumstances this can be waived by the lessor. All maintenance events during heavy checks or engine shop visits, will be covered by the maintenance reserves A minimum redelivery condition is agreed for the aircraft // 15

16 INVESTING IN THE AVIATION INDUSTRY Aicraft Financing Airlines and lessors rose more than USD 45 billion in secured and unsecured debt in 2016 Aircraft purchases can be completely or partly financed via direct lending Depending on the amount of the loan, direct lending might be accompanied by a security interest The loan amount is a senior debt Due to lower risk, dividends are generally lower than for equity investors Although the lenders do not have an ownership title, it is advantageous to closely monitor the asset to protect its value in case the operator or borrower get into financial difficulties and the aircraft needs to be remarketed Hybrid transactions combine aircraft leasing (equity amount) and financing Besides there exist a variety of further aircraft financing models such as finance or tax leases or bank loans Asset Management as Factor of Success Asset management should be custom-tailored to the specific needs of the client and involved parties The business philosophy of DS Aviation is based on Holistic approach Optimised communication channels Highly experienced experts Reliable partner to third parties Long-term relationships The professional asset management protects the value of the asset and minimises the risk exposure for lessors, lenders and investors // 16

17 TEAM The aviation team is continuously growing and the company employs highly experienced staff. One of the key factors is that all the team members have different professional careers and experience which lead to the profound and wide-ranging experience of the Dr. Peters Aviation department. CHRISTIAN MAILLY STEPHAN RIHM BÉATRICE PETERS Position: Managing Director Studies: Master of Business Administration (BWL) Aviation Experience: 19 years Professional History: Commerzbank, HSH Nordbank SABRINA WEBER Position: Senior Vice President Studies: Bachelor of Commerce, Bachelor of Law Aviation Experience: 17 years Professional History: Macquarie, Amentum, MTU FRAUKE GERDES Position: Senior Manager Studies: Translation (Master), General Manager (EBS) Aviation Experience: 17 years Professional History: Sommer Allibert Lignotock, Deutsche Structured Finance, KGAL JULIAN BALAAM Position: Manager Studies: Master of Business Administration (BWL), Aviation Management Aviation Experience: 10 years Professional History: Do & Co., Dertour SEBASTIAN WIEGAND Position: Executive Assistant Studies: Master of Business Administration (BWL) Aviation Experience: 7 years Professional History: HSI JOVANA DURDEVIC Position: DS Skytech Director Studies: Master of Engineering Aviation Experience: 31 years Professional History: British Aerospace, Airbus, Bombardier Shorts PHILIPP WIGGER Position: Manager Studies: Master of Business Administration (BWL) Aviation Experience: 3 years Professional History: Commerz Real, GEBAB Position: Assistant Manager Studies: B.A. Psychology Management Aviation Experience: 2 years Position: Strategic Assistant Studies: Engineering and Economics (B.A. industrial engineering) Aviation Experience: 3 years Professional History: Lufthansa Technik, MTU Maintenance // 17

18 CONTACTS DS AVIATION GMBH & CO. KG - MEMBER OF DR. PETERS GROUP Christian Mailly Stockholmer Allee Dortmund Germany Tel.: +49 (0) aircraft@dr-peters.de Dr. Peters Group Head Office, Dortmund, Germany // 18

19 NOTES // 19

20 DR. PETERS GROUP