Sumitomo Mitsui Trust Bank targeting US$500 million for new aircraft lease fund

[TOKYO] Japan’s Sumitomo Mitsui Trust Group (SMTG) is planning to launch a new aircraft lease fund, aiming to raise US$500 million from investors in Japan, Asia and the Middle East, an executive said.

The launch marks the latest push to expand aircraft leasing investment by a Japanese financial institution hoping to tap into a market that is expanding globally due to aircraft shortages at airlines and supply constraints at Boeing and Airbus.

The fund, which will purchase Boeing and Airbus aircraft and lease them to airlines globally, is the third that SMTG has launched along with Novus Aviation Capital, following funds launched in 2016 and 2019.

While the two previous funds focussed on domestic institutional investors, SMTG intends the new fund to act as a springboard to expand sales of private assets to overseas investors, the head of Sumitomo Mitsui Trust Bank’s asset finance team Takeru Mifune said.

Among domestic players, Mercuria Holdings and Daiwa Securities recently announced the establishment of a new aircraft lease fund, while Sumitomo Mitsui Financial Group and Orix have been strengthening their airline lease businesses. REUTERS