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Castlelake Launches Aviation Lending Division

Castlelake Launches Merit AirFinance to Expand Aviation Lending Capabilities
Investment manager Castlelake L.P. has announced the establishment of Merit AirFinance, a new aviation lending division designed to provide debt capital to airlines and leasing companies for both new and used aviation assets. Merit AirFinance begins operations with over $1.8 billion in committed capital, available through separately managed accounts, and will function as a distinct subsidiary to clearly separate Castlelake’s leasing and lending activities.
Strategic Focus and Leadership
Merit AirFinance aims to deliver flexible and innovative debt solutions, building on Castlelake’s extensive experience in aviation finance. Since 2020, Castlelake has deployed more than $5 billion to airlines and leasing companies, underscoring its significant presence in the sector. The new division will operate from a dedicated office with a specialized origination team focused exclusively on aviation lending.
Patrick Mahoney, formerly part of Castlelake’s aviation capital markets team, has been appointed President of Merit AirFinance. Mahoney brings a wealth of expertise from his background in aviation underwriting, asset-based direct lending, and capital markets. Meanwhile, Jakob Gallagher, who has 13 years of experience in aviation capital markets and most recently served as Head of Capital Markets at Wings Capital Partners, will succeed Mahoney as head of Castlelake’s aviation capital markets function.
Evan Carruthers, CEO and CIO of Castlelake, highlighted the company’s commitment to providing adaptable financing solutions across the aviation sector. He stated, “The formation of Merit AirFinance exemplifies our solutions-oriented partnership approach. We believe this strategy benefits both aviation industry participants and our investors, creating more opportunities to match capital with attractive risk-adjusted aviation exposure.”
Market Context and Competitive Landscape
Merit AirFinance enters a competitive and challenging market environment. The leveraged loan market remains constrained, with established players such as JetLoan Capital and Willis Lease Finance actively competing for market share. Industry analysts suggest that reactions to Castlelake’s new division may be mixed. While some investors view the move as a positive signal for renewed momentum in business aviation financing, competitors are expected to intensify their marketing efforts and forge strategic partnerships to maintain their positions.
Founded in 2005, Castlelake is a global alternative investment manager specializing in asset-based private credit. The firm manages approximately $22 billion in assets on behalf of a diversified investor base and maintains a strategic partnership with Brookfield Asset Management Ltd., which oversees more than $1 trillion in assets.
Merit AirFinance will focus on originating, underwriting, and structuring aviation credit facilities ranging from single-asset loans to large-scale financings. The division’s team comprises seasoned aviation finance professionals dedicated to a solutions-driven approach and fostering long-term client relationships.

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