DAE's new leasing platform with Neuberger Specialty Finance targets USD 6 bn

DAE goes shopping for capital, again: Dubai Aerospace Enterprise (DAE) and Neuberger Specialty Finance are launching Mustang Aerospace, a new aircraft-leasing co-investment platform targeting around USD 6 bn in investments across multiple vehicles over the medium term, according to a press release. The two will use the platform to acquire a diversified fleet of aircraft for airline customers worldwide.

Why it matters: This is DAE’s second co-investment platform in three months after it launched Equator with Blackstone Credit & Ins in April, which targets around USD 1.6 bn in annual aircraft investments.

Off DAE’s own books: “DAE has been expanding its aircraft investment and asset management capabilities for some time, and Mustang provides another avenue to scale those activities using institutional capital rather than relying solely on its own balance sheet,” Sindy Foster, principal managing partner at Avaero Capital Partners, tells EnterpriseAM.

The institutional-capital model gives DAE more room to grow: “Institutional capital allows DAE to grow faster without materially increasing leverage on its own balance sheet, while generating recurring management and servicing income alongside lease revenues,” Foster says.

Six banks, one warehouse: Goldman Sachs, Mizuho, BNP Paribas, MUFG, Société Générale, and Truist have all agreed to provide committed warehouse financing for the new vehicle.

That points to a platform built to scale: “Warehouse financing gives the platform flexibility to move quickly when aircraft or portfolios become available before refinancing through longer-term capital,” Foster argues. “It also demonstrates strong lender confidence. Aircraft acquisitions require significant amounts of capital and speed of execution, so having multiple banks involved provides both funding capacity and diversification of financing sources,” she says.

What Neuberger brings to the table: Neuberger manages more than USD 5 bn across more than 50 portfolio companies and investment vehicles and has invested more than 16 bn through 80 origination partners since the strategy launched in 2018.

Mustang has not disclosed target aircraft types — but the market points in a fairly clear direction. Foster expects the platform to prioritize liquid, in-demand aircraft with strong lease prospects, particularly next-generation narrowbodies that remain attractive amid delivery delays and supply-chain constraints.

IN CONTEXT- The new vehicle arrives alongside DAE’s pending acquisition of Macquarie AirFinance. The Dubai-based lessor signed a definitive agreement in 1Q this year to acquire 100% of Macquarie AirFinance. DAE is also targeting up to USD 3 bn in aircraft acquisitions this year and expects more than 30 deliveries from Boeing, Airbus, and ATR. CEO Firoz Tarapore highlighted that the company had acquired more than 300 aircraft over the past three years through acquisitions and direct manufacturer purchases.