Aviation Capital Group is targeting investment funds and institutional investors to place and manage aircraft in order to attract "good yields", according to the lessor's new chief executive.
"Our preference is to sell assets to financial investors," says ACG's Denis Kalscheur in an interview with Flightglobal.
Kalscheur admits there is increased competition in the market as more long-term money, or bank funding, has flowed into sector in the past year looking to profit from the "relatively stable returns" in operating leasing and "growth from airlines seeking more fleet and balance sheet flexibility".
"As the business becomes more commoditised we need to make sure you we have a competitive cost base and the ability to provide more comprehensive fleet solutions to airlines."
With Pacific Life Insurance as a parent, ACG has the "original" long-term investor, he says. "It really does not get more long-term than that. And the advantage is we don't have to grow, but we will grow. Maybe at times it will be on our balance sheet and other times we will focus on our return on equity from assets under management. We can decide."
Kalscheur believes more long-term money in the business also means different return expectations from investors.
"This money will demand less returns than 'hotter money' such as from many private equity firms. It is good to have long-term investors creating a better playing field as this means better long-term decisions for the industry."
Kalscheur became chief executive officer of ACG as of 1 January, succeeding Stephen Hannahs, who retired at the end of 2012.
Hannahs was one of the founders of ACG and has overseen its growth as group managing director and chief executive since ACG's founding in 1989.
He will continue to serve on the board of ACG in the new position of vice-chairman.