Castlelake Hits $1B Hard Cap With Third Aviation Fund

Jun 1 2017 | 11:41pm ET

Global private investment manager Castlelake LP has raised $1 billion in capital commitments for its third aviation-related fund.

The new fund, named Castlelake Aviation III Stable Yield, closed at its hard cap, according to the company. Commitments were received from a diverse base of endowments, foundations, family offices, sovereign wealth, insurance companies, financial institutions and pension funds based in the U.S., Europe and Asia.

The fund will make investments in leased younger mid-life aircraft on contracted operating leases, Castlelake said in a statement. It aims to leverage the company’s fully integrated aviation platform of aviation investment professionals, technical experts and asset management specialists to achieve risk-adjusted rates of return and cash flow. 

Aviation III is the third dedicated aviation fund raised by Castlelake. In 2005, the company formed Castlelake Aviation I in order to capitalize on opportunities in the U.S. airline bankruptcy cycle, and formed Castlelake Aviation II in 2010 to capitalize on distress in the industry caused by the global financial crisis. 

Each of Castlelake’s flagship general purpose investment funds has also had meaningful aviation exposure, the company added. Since inception, Castlelake funds have invested more than $4.7 billion in aircraft assets and obligations, acquiring more than 440 aircraft and 950 engines across multiple aircraft and engine types. 

“In closing Castlelake Aviation III Stable Yield, the fund is capitalized to opportunistically invest in its differentiated younger mid-life aviation investment strategy,” said Rory O’Neill, managing partner and CEO of Castlelake. “We are grateful for the support of our investors.”

Founded in 2005 by Rory O’Neill, Castlelake is focused on investments in alternative assets, sub-performing loans, dislocated industries and corporate special situations, and is an experienced leader in aircraft ownership and servicing. The company manages private funds with approximately $10 billion in assets for endowments, foundations, public and private pension plans, private funds, family offices, insurance companies and sovereign wealth funds.

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