Fifth Street Finance turns to aircraft leasing with launch of First Star Aviation

New leasing company closes first aircraft investment and names Pradeep Hathiramani as managing director.

Fifth Street Finance has entered the aircraft leasing market with the launch of a new subsidiary named First Star Aviation LLC.

The new company appointed Pradeep Hathiramani as its managing director, after closing its first aircraft investment, which involved leasing three commercial aircraft to a US airline. The transaction also saw Fifth Street provide First Star with debt and equity capital to execute on the strategy.

Hathiramani joins First Star from KKR Asset Management LLC, where he was principle and section head of transportation. He brings more than 15 years of lending and leasing experience in the transportation industry, having spent seven years at GATX Financial Corporation as director of the Aircraft Leasing Group, prior to joining KKR.

“Aircraft leasing is a multibillion-dollar industry, which has grown rapidly over the last 25 years due to the increasing global demand for air travel and the rising appeal of leasing versus owning aircraft by capital constrained carriers,” said Ivelin Dimitrov, Fifth Street’s chief investment officer. “We believe the rapid growth of the leasing industry is poised to continue as financing costs for aircraft are rising and large banks and European financial institutions are scaling back lending activities due to new regulatory and liquidity constraints, including Basel III.”

Hathiramani said: “Fifth Street’s established underwriting platform and access to capital provides significant competitive advantages as we execute our acquisition strategy and seek to take advantage of high quality opportunities, particularly among mid-to-end of life aircraft.  By focusing on mid-age aircraft, we intend to help fill the financial void in underserved segments of the market.  We plan to use a disciplined and value-oriented investment approach to acquiring aircraft and leasing them out on long-term charters to carriers around the world.”