Aftermarket specialist AAR is forming a joint venture with Napier Park Global Capital that will focus on acquiring late life commercial aircraft, expanding its asset management activities.

AAR has been appointed the sole servicer for the newly formed strategic alliance between the companies, with AAR to bring its extensive aircraft MRO, leasing and trading experience to the role of asset manager. It will establish and manage the aircraft portfolio, as well as develop exit strategies.

The Chicago-headquartered company says the main focus will be on acquiring yield generating assets maximising returns as aircraft reach the end of operational life. AAR will work with majority partner, Napier Park, to target assets that retain value in the aftermarket once aircraft retire from service.

“We appreciate the opportunity to lend our extensive expertise in the aviation aftermarket to provide significant competitive benefits to the new venture,” said Pat Aherne, senior vice-president and general manager, AAR Aircraft Sales & Leasing. “As the third largest aircraft MRO in the world and one of the largest suppliers of engine and airframe components, AAR brings a broad range of products and service capabilities to the role of aircraft asset management.”

Napier Park is an alternative investment manager that, as of 30 September 2018 managed US$11.5 billion in capital. It will be the majority equity participant in the JV. BNP Paribas acted as exclusive financial and capital raising advisor to AAR in the transaction.

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