Commercial Aircraft: Risk Adjusted Returns Versus Competing Investment Classes

The equipment leasing arena is increasingly focused on the capital formation question and how to explain itself with greater clarity to capital markets in the broadest context ofthat term. Because much of the equipment leasing market portfolio is dominated by what is called an embedded loan portfolio,

It is not that such an approach is inappropriate: particularly with shorter lived equipment categories the leasing product behaves more like a loan product than it does a hard asset investment with an enduring useful life. However, expanding the pool of fixed income investors is only part of the puzzle. It might be beneficial to broaden the question and furthermore, to address new sources of capital. Here we suggest two major actively followed capital market categories to consider, namely private equity funds and hedge funds.