Doric selling helicopter Kommanditgesellschaft (KG) fund

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Doric, a specialist asset finance arranger, is marketing a closed-end fund to German investors that will acquire five helicopters operated by CHC Helikopter. The closed-end or Kommanditgesellschaft (KG fund) will buy five different models of helicopter manufactured by Eurocopter, Sikorsky and AgustaWestland.

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Doric, a specialist asset finance arranger, is marketing a closed-end fund to German investors that will acquire five helicopters operated by CHC Helikopter. The closed-end or Kommanditgesellschaft (KG fund) will buy five different models of helicopter manufactured by Eurocopter, Sikorsky and AgustaWestland.

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AW842 flying Doric, a specialist asset finance arranger, is marketing a closed-end fund to German investors that will acquire five helicopters operated by CHC Helikopter.

The closed-end or Kommanditgesellschaft (KG fund) will buy five different models of helicopter manufactured by Eurocopter, Sikorsky and AgustaWestland.  Doric says it is confident that the helicopters will retain their value well and, because they can fly a range of mission types in different continents, it can remarket the assets easily.

KG Funds are typically sold to private and institutional investors including insurance companies, pension funds and family offices. Shares are issued once to buy assets and although they can be traded, they cannot be redeemed until the end of its term.

The helicopter fund will use cash raised from selling shares and some debt to acquire the helicopters which will be on long-term leases to CHC Helikopter. At the end of the fund’s term the helicopters will be sold to repay investors.

Doric’s helicopter fund has a minimum investment of $10,000 plus a 5% fee. Doric says it is projected to distribute between 8% and 14% each year and pay 258% in total over the fund’s 14 year term. Debt will be repaid after 12 years.

BaFin, the German financial regulator, approves all KG funds before distributors, like Doric, are allowed to issue prospectus.

Unlike US closed-end-companies, which often invest in shares, KG funds typically invest in asset like container ships. During the 1990s KG funds were usually reliant on tax breaks however they were re-launched more recently with a focus on getting a real return from assets.

Doric was one of the first arrangers to adapt them to commercial aircraft with a landmark deal financing five A380s for Singapore Airlines.

By 2008 over 2.2 million investors had invested in German KG funds.  

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