The management team at newly launched aircraft
asset manager Falko believe strong financial backing and long term
commitment have unleashed the potential for growth.
Falko was officially created on 15 July from
the sale of BAE Systems Asset Management (AM) following a year of
negotiations between aircraft manufacturer BAE, the management team
who have bought the business and their 100% equity backers Fortress
Investment Group.
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Chief executive Jeremy Barnes said the new
company, with backing of the New York-based investment group, would
unlock the potential of an ambitious team to grow the business in
the long term.
He said: “We have the support of a very
powerful financial backer that has made a considerable investment
in the business and is looking to deploy more capital to support
and grow the business.
Barnes added BAE had run the company, which
sold for $187m (€131m), with an exit strategy in mind for some time
and had therefore been unable to make long term plans for a
business that was not core to their main activity.
“We are now free of past constraints and have
greater scope to be entrepreneurial,” he said.
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By GlobalDataFalko inherits a portfolio of 143 aircraft
independently valued between $300-400m (€211-281m) and a contracted
forward order book in excess of $220m (€155m).
BAE Systems AM was the world’s second largest
regional aircraft lessor.
Barnes said the initial focus for Falko is to
maximise the cash flow proceeds from the current portfolio, selling
assets when appropriate, leasing assets where possible and
extending leases with key customers.
Falko takes over a base of 14 lease customers
in 11 countries and Barnes said relationships exist with other
airlines which the company can build on.
He said the backing of Fortress, which manages
a $43bn global asset fund, would allow the company both to invest
to increase the value of current assets and to expand their current
portfolio.
The company, while continuing in the regional
aircraft market, will look at buying existing asset portfolios from
elsewhere as well as new aircraft models when they emerge, said
Barnes.
He added “We plan to invest in selective
acquisitions of both used, and eventually, new aircraft to build a
future portfolio that is cohesive and for the long-term.”
In a demonstration of the company’s capital
might, Barnes refused to rule out any purchasing strategy, saying
“if the deal is right we will buy it.”
Operations have remained consistent during the
transition said Steve Doughty, who joins from BAE Systems AM as
senior vice president of sales and marketing.
Doughty said so far in 2011 15 aircraft had
been placed with clients around the globe and said negotiations
were underway involving another 63 aircraft in a mixture of new
leases, lease extensions and purchases.
The new company is on track to have a
relatively consistent year as historically BAE Systems AM concluded
deals involving 40 to 50 aircraft annually said Doughty.
Barnes is joined on the new board by Martin
Brennan as chief financial officer, Mark Hughes, executive vice
president of treasury, James Greenstreet, executive vice president
portfolio strategy, and Sarah Dichlian as chief general counsel who
all bought in to the company after working together first at BAE
Systems AM until 1998 and then at advisory company Orbis
Capital.
Doughty is joined from BAE Systems AM by Paul
Stirling and Rob Morris as executive vice president of asset
management and vice president of marketing and analysis
respectively.
grant.collinson@vrlfinancialnews.com
