Guggenheim flies high with $250m fund

Guggenheim Aviation Partners has closed a new fund to purchase used passenger planes, partnering Guggenheim Capital with a group of aircraft lease experts.

Sammamish, Washington-based private equity partnership Guggenheim Aviation Partners closed its debut Guggenheim Aviation Investment Fund on $278 million (€193 million). The final close exceeded its original target of $250 million.

The final close exceeded its original target of $250 million.

The fund will focus on converting used passenger planes, including the Boeing 747-400 and MD-11 models, for freight use and then leasing or selling them to the air freight market, said the source. Demand for freight planes has reportedly grown as the volume of exports coming out of the emerging economies in Asia has increased.

The fund, which had a first close on $200 million in February, has already purchased seven Boeing 747-400 jets, according to press reports. The fund reportedly paid $500 million for the planes.

According to the source, limited partners include foundations, endowments, fund of funds, high-net-worth individuals and ERISA investors.

The fund partners Chicago-based Guggenheim Capital with a group of aviation advisors. A number of fund’s executives, including chief executive officer Steve Rimmer, were formerly at Curtis & Company, an aircraft leasing firm that was sold to General Electric.

Guggenheim Capital has more than $90 billion under management.