KB Kookmin Bank announced on March 13 that it has invested US$20 million (22.65 billion won) in a foreign equity fund specializing in investing in global aircraft makers.
The aircraft finance market has been growing steadily thanks to an increase in air passengers and air freight, and it is a market worth more than US$100 billion (113.25 trillion won) a year, with funds raised through various financial tools, such as syndication, bond issuance and insurance.
KB Kookmin Bank is planning to invest US$10 million (11.33 billion won) each in two aircraft finance funds, Tamweel Aviation Finance ll and Cedar Aviation Finance, which is operated by Novus Aviation Capital, a foreign equity fund specializing in aircraft finance. The two funds are expected to attract US$400 million (453 billion won) and US$300 million (339.75 billion won), respectively. Not only aircraft manufacturers Airbus and Boeing but also global financial institutions are taking part in the funds as investors.
Novus Aviation has operated funds and made investments in the aircraft finance market for over 25 years. The company has released a new fund based on the successful operation outcome of Tamweel Aviation Finance participated in by Airbus in 2013.
Meanwhile, the “One-Firm KB” strategy, which has been stressed by KB Financial Group chairman Yoon Jong-kyu, is embodied in the latest investment. The group is expected to create a synergy effect as KB Kookmin Bank directly takes part in the fund as an investor and KB Securities sells the fund in the domestic market.