Nova Capital launches first light helicopter backed private debt fund


European lessor Nova Capital has launched the first light helicopter backed private debt fund with an initial commitment of 50m. Branded Nova Capital Light Aviation Debt Fund, the service is said to be the first private debt vehicle backed by single engine helicopters and light utility fixed wing aircraft.

Olivier Piot, founder and CEO, Nova Capital told Helicopter Investor: “We are entering in a clear momentum where private debt is bringing significant added value compared with other financing sources. Current classic debt market conditions are getting drastically more restrictive and interest rates more than doubled over the past few months.”

Private debt offers more flexibility, underwriting capabilities, re-investment interest and other benefits, he added. “The mark-up you could eventually face with private debt pricing is getting every day thinner and I consider it is now more than compensated by its advantages,” says Piot. This was   said to be particularly relevant in a segment where assets’ unit price are relatively small.

The new financing programme offers non-banking investors access to asset-backed private debt opportunities for single engine helicopters and aircraft, operated for on-shore mission critical and utility services. The total commitment is an initial 50m, for which Nova Capital received interest from various private investors ranging from individuals, family office, or investment funds. All were said to share previous aviation experience and commitment to the industry.

Nova Capital highlights that investments are not confined to hedge funds. “We received significant interest ranging from individuals or family offices to debt funds,” Piot tells us. “While there is no public offering for this programme, we are voluntary willing to limit the number of our investing partners and give a particular value to their long-term commitment to the aviation industry.”

Interest from some long-term operators/customers’ shareholders was particularly welcome, he adds. “This is giving me even more reasons to be cheerful and convinced we are making a right move for this asset class.”

The helicopter industry is lucky to deal with resilient assets, with strong residual values and recurrent long term cash flows attached, according to Nova Capital. “This is all about what investors are looking for under the current market conditions and uncertainties,” says Piot. “Moreover, we are offering them access to a new asset-class, single engines, while ensuring risk mitigation through our large portfolio and deal flow history.”

Nova Capital is not planning an intensive marketing campaign – preferring instead to focus on a limited number of experienced aviation investors. Volume needed to build a resilient and diversified portfolio for onshore utility assets is nothing like what is necessary for example for Emergency Medical Services (EMS) or oil and gas operations, says Piot.

The lessor has also revealed the acquisition of 12 new single engine assets over fourth quarter (Q4) of 2022 and Q1 2023. This brings its owned fleet to 54 assets with a combined total value of more than $200m. This includes an additional five utility configured helicopters under sale and leaseback transactions with three different undisclosed customers.

The latest additions to the portfolio include two Leonardo 119s and three Airbus H125s. Delivered between October 2022 and February 2023, these helicopters are already deployed on firefighting and aerial missions in Italy, Spain, Portugal, Chile and Belgium. The company also signed a sale and leaseback agreement with an undisclosed customer for the acquisition of a seven aircraft fleet including a mix of recently produced and factory new Thrush 710P. These aircraft will be delivered during Q2 2023 and operated exclusively for firefighting missions in Spain, Chile and France.

Meanwhile, Piot will be joining the panel on Rotary leasing 2023 at our conference on Thursday March 23rd. There’s still time to join nearly 300 leading industry professionals at our Helicopter Investor London 2023 at the Royal Garden Hotel on March 22nd and 23rd. Take a look at our action-packed agenda here and book your place at Helicopter Investor London 2023 here.

Oliver Piot, founder and CEO, Nova Capital.