05 July 2019

Carey Olsen advises Falko on US$650 million aircraft leasing fund

Carey Olsen has advised Falko Regional Aircraft Limited (Falko), a market leading aircraft operating leasing and asset management company, on the launch and final closing of Falko Regional Aircraft Opportunities Fund II at US$650 million.

The fund, which has been established as a Jersey Expert Fund, surpassed its original fundraising target of $600 million and will make equity investments in new and used regional aircraft leased globally. It received commitments from a diverse group of institutional investors, including public and private pension plans, insurance companies, wealth managers, endowments, family offices, a fund of funds and a sovereign wealth fund from across North and South America, Europe, the Middle East, Asia and Africa.

Working alongside onshore counsel Kirkland and Ellis, Carey Olsen advised on the fund's incorporation and establishment as a Jersey Expert Fund and on all Jersey-related corporate and regulatory aspects of its launch. The team was led by partner Daniel O'Connor and assisted by senior associates Claire Brazenall and Nienke Malan and associate Aidan McConville.

Daniel said: "Having supported Falko with its inaugural fund in 2015, it was a privilege to work with the company once again on the launch and successful close of its second fund. The fact it comfortably reached and passed its original fundraising target is testament to Falko's market leading position in the aviation industry.

"The successful launch is also further proof that Jersey continues to be a jurisdiction of choice for alternative fund managers seeking a more cost-effective and flexible alternative to the AIFMD passport. Marketing into the EU from Jersey through National Private Placement Regimes offers a lighter regulatory burden that can help future-proof EU focused funds post-Brexit."

Jeremy Barnes, chief executive officer at Falko, commented: "Carey Olsen's legal advice and support was central in ensuring a smooth and efficient closing process and provided Falko with the necessary experience, industry insight and professionalism it looks for when structuring and establishing our funds."

Falko has already made its first investment from the fund with the purchase of a portfolio of 19 current generation Embraer and Bombardier regional jet aircraft with leases attached, representing an equity investment in excess of US$100 million.

Falko was formed in July 2011 when funds managed by Fortress Investment Group backed the Falko management team through the management buy-in of BAE Systems Asset Management.