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AIP Capital and Monroe Capital Launch Aircraft Leasing Partnership

AIP Capital and Monroe Capital Form $1 Billion Aircraft Leasing Partnership
AIP Capital, a global investment manager specializing in asset-based finance, has entered into a strategic partnership with Monroe Capital LLC to acquire a diversified aircraft leasing portfolio valued at up to $1 billion. The portfolio will primarily consist of mid-life commercial aircraft placed on long-term leases with airlines worldwide. Under the terms of the agreement, Monroe Capital will provide the investment capital, while AIP Capital will act as the asset servicer, managing portfolio operations and maintaining engagement with airline clients.
Financing and Strategic Objectives
To support the initial phase of the venture, Monroe Capital has secured a $500 million senior secured warehouse facility from Deutsche Bank AG New York Branch and Fifth Third Bank. Jared Ailstock, Managing Partner at AIP, emphasized the significance of the partnership, noting that it offers scalable and stable capital. He highlighted that the collaboration aims to enhance value for global airline customers and lessor trading partners amid increased volatility in capital markets. Ailstock also indicated that the partnership is expected to expand further in the coming months.
Aaron Peck, Managing Director and Co-Head of Alternative Credit Solutions at Monroe Capital, described the venture as aligned with their strategy of partnering with experienced operators in sectors characterized by strong asset fundamentals and long-term demand visibility. He identified aviation as a natural extension of Monroe’s platform, positioning the partnership to deliver attractive, risk-adjusted returns for investors.
Market Context and Competitive Challenges
The launch of this partnership occurs amid heightened competition and scrutiny within the aircraft leasing sector. The venture faces challenges from both established and emerging competitors, including fractional ownership programs such as Magellan Jets and Slate Aviation’s Challenger 850 initiative, which are transforming traditional models of aircraft access and ownership. Additionally, the market is closely monitoring the financial sustainability of new leasing models, particularly as demand for liquidity in next-generation engine leasing intensifies.
Responses from competitors are evolving as well. Major industry players like Air France-KLM have formed strategic alliances, exemplified by its recent collaboration with Riyadh Air, which could redirect market focus and resources. Regulatory concerns also loom large, as demonstrated by Spirit Airlines’ recent appeal to U.S. authorities to reject the JetBlue-United partnership. Such developments underscore potential challenges related to competition and market dynamics that may affect new ventures like the AIP-Monroe partnership.
Legal and Operational Framework
Legal counsel for the transaction was provided by Gibson Dunn for AIP Capital and Milbank LLP for Monroe Capital, with PwC and KPMG serving as tax advisors, respectively. AIP Capital currently manages approximately $4 billion in assets globally, operating from offices in Stamford, New York City, Dublin, and Singapore, supported by a team of over 30 professionals.
As the partnership advances, its success will hinge not only on effective operational execution but also on its ability to navigate a rapidly evolving and increasingly competitive aircraft leasing market.

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