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'Property on wings' fund takes off on £220m fundraising

by Sarah Miloudi on Jul 02, 2013 at 13:02

'Property on wings' fund takes off on £220m fundraising

Doric Nimrod Air Three (DNA3), a closed-end aircraft leasing fund, has listed with £220 million in assets.

DNA3 is part of a suite of plane funds designed to act like 'property on wings' and historically the strategy has been backed by a host of institutional investors.

Like DNA and DNA2, the first two funds in the range, the managers of DNA3 will snap up four A380 aircrafts and rent them to Emirates.

Each lease will last for up to 12 years and DNA3 will aim to pay investors a dividend of 2.06p per share per quarter, equivalent to an annual dividend of 8.25% per £1 share.

In addition to this regular yield, once the leases have expired the planes will be sold and investors paid out from the residual value.

At the end of 2010, DNA raised in the region of £46 million and was backed by the likes of Baring and Insight Investors.

Explaining the draw of the investment, Insight's Shantanu Tandon said the fund had all the attractions of more typical infrastructure or real asset funds and as well as an income, offered investors the opportunity for growth.

Tandon, who sits in the investment manager’s multi-asset team, said at the time: 'Our investment in Doric is an extension of the infrastructure, or real asset, opportunities which we have been capturing in our multi-asset portfolios.

‘These opportunities capture attractive returns in non-construction related areas. Doric has an attractive return profile given its strong income generation from the leasing of the aircraft.’

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