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January 2017 Stellwagen Capital Whats the Mission? Provide - - PowerPoint PPT Presentation
January 2017 Stellwagen Capital Whats the Mission? Provide - - PowerPoint PPT Presentation
Airline Economics Growth Frontiers - Dublin January 2017 Stellwagen Capital Whats the Mission? Provide Innovative Financing Solutions to our Customers and become the Largest and Most Profitable Aviation Fund in the World Pillars of
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“Provide Innovative Financing Solutions to our Customers and become the Largest and Most Profitable Aviation Fund in the World”
Stellwagen Capital – What’s the Mission?
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Pillars of Success
Experienced, Incentivised Management Team Innovative Investment Products Aviation Debt Market Opportunity Globally Sourcing Investors & Capital
Exceptional Returns Unique Capability
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Highly Efficient Low Cost Structure
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Stellwagen Group Structure
Stellwagen Technology (“StellTec”) Guardian Holdings Stellwagen Capital (“StellCap”)
Stellwagen Group
Stellwagen Finance (“StellFin”) Seraph Aviation Management (“Seraph”) Loan Origination Portfolio Management Asset Management Technology
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It’s About People’s Attitude…………
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88 years Management/Background Professional Experience Howard Millar: CEO - Ryanair, Almarai 28 years Edward Hansom: CRO - AerFi/GPA Group, SMBC 28 years Pradeep Hathiramani: CIO - Fifth Street, KKR, GATX 23 years Michelle O’Toole: Inv. Rel. - Blackstone, Lehman Brothers 9 years
Highly Experienced & Incentivised Management Team
Average of 20 years experience All invested & incentivised via bonus & shares Total:
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Traffic Growth Drives Opportunity
Source: Airbus Global Market Forecast 2015-2034 (presentation), p.10.
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Aircraft are a Low Risk Investment Asset
Loss and Recovery Rates for All EETCs (1994-2014)(2)
Over 20 years of EETC loss history demonstrates very stable collateral price performance despite high levels of airline corporate defaults
Tranche Approximate Cumulative Loss Rate Cumulative Recovery Rate A 0.1% 99.9% B 1.4% 98.6% C 3.0% 97.0%
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Aircraft Returns Compare Favourably to Other Asset Classes
(1) Sources: Seraph, Ascend, Guardian, NCREIF Real Estate Index, Bloomberg. (2) This analysis includes 38 passenger aircraft types, including both single- and twin-aisle models. Aircraft performance figures would be better on both measures (annual return and volatility) with simple asset selection. (3) US real estate is more volatile by region than the national figures reflected in the NCREIF index used here.
During periods of higher airline stress and defaults, aircraft values weakened, but for shorter periods and to a lesser extent than most other asset classes
Asset Class Analysis (1986-2016)(1) Asset Class Average Total Return (CAGR) Volatility of Returns Correlation with Aircraft
Aircraft(2) 6.8% 9.3% 1.00 S&P 500 7.4% 14.9% 0.52 US Real Estate(3) 7.9% 7.9% 0.48
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Aviation Debt Market Opportunity
- Aviation Banks retreat due to Basel III & IV and capital requirements
- US and EU export credit banks closed
- $127 billion of new aircraft deliveries in 2016, rising to $172 billion by 2020
- $70 billion worth of aircraft to be re-financed annually
- Senior loan economics attractive for both airlines and lessors – Operating Lease Killer
- Very restricted competitive offerings from just a few banks
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Senior Loan Investment Opportunity
- Provides secured financing to both airlines and lessors
- Very attractive balloon structure – cash flow light
- 10 year closed end investment grade fund
- Target return with leverage of 7%
- Innovative loan trading drives returns to over 10%
- A dynamic investment with significantly higher returns than competitors
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Highly Efficient – Low Cost Structuring
Highly efficient tax structure No withholding tax on distributions Low fees negotiated with all service providers Use technology and outsourcing to keep costs low Ensure maximum returns generated for investors and Group
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It’s Never Plain Sailing
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