ISTAT Jetrader - Spring 2023 - 16

PERSPECTIVES
record and, as importantly, we had the
tried and tested team. If we made 100
pitches, we got 97 no's. But we kept
at it. In May 2010, we launched Avolon
with committed equity capital of $1.1
billion from three private equity firms,
and subsequently GIC.
just 10 months later, we received
an unsolicited bid from two Chinese
parties who wanted to own a global
aircraft leasing company and who were
prepared to pay a big premium. We
negotiated an offer for $31 a share,
which gave our IPO investors about a
We challenged our people to be the best at what
they did, but we were also innovative in so many ways
around our global and corporate responsibilities around
thought leadership.
Our lead investor was Denis
Nayden, then a managing partner at
Oak Hill Capital and a former CEO and
chair of GE Capital. Most of the Oak
Hill underwriting was led by Rowan
Taylor, who was an early and important
believer in our vision. Denis would go
on to become Avolon's first board chair
and is still on the Avolon board today.
He was another crucial tailwind. Denis
knew how to run a big company or,
as he would often remind us, " How to
swing with a big bat. " His guidance was
truly indispensable to me.
So, we knew we had the team, we
had the money, and the timing was
perfect. We had a chance to build a
business where we could take all of
the lessons and experiences that we'd
all learned over the previous 20 years,
some as a founder, some working
within a large institution, and build
something special. Not just financially
successful, but a company that would
become the benchmark for excellence
in the industry. That wasn't just an
aspiration; this was something we
spoke about as a team every day.
In December 2014, we took Avolon
public, an objective that was central
to the original Avolon business plan
crafted five years earlier. We did this
at $20 a share, and then in October,
16 * THE OF F I C I AL PUBL I CAT I ON OF ISTAT
55% return within a year. We took it
private in January 2016. That whole
experience of prepping a company to
bring it public, going on the roadshow,
running a public company, and then
taking it private and doing all of that
literally in 13 months, it's just this
whirlwind of activity. It was a huge
financial success. It was an education
in all things business.
So now, it's 2016, and we're 100%
owned by HNA. At that point, HNA was
a large Chinese conglomerate with
ambitions of being the largest company
in the world. Avolon itself was on an
ambitious growth strategy. When an
opportunity arose to buy CIT's aircraft
leasing business, we jumped at it. They
had a $10 billion balance sheet, we
were a $10 billion balance sheet, and
we bought the company. That doubled
the size of Avolon. That was in the
2017-2018 time frame. At that stage,
we were still just eight years old.
By then the markets were getting
nervous about HNA and their acquisition
spree. We, as a management team,
were keen to make sure that we had
insulated Avolon from any challenges
that HNA might be facing. This saw
ORIX Aviation (now led by my great
friend James Meyler) introduced as a
30% shareholder in 2018. HNA sold
30% of the company for $2.2 billion,
and ORIX became a shareholder. We
negotiated a governance structure
that fully insulated Avolon from HNA.
Because of our credit metrics and with
ORIX on board as a shareholder, we got
upgraded to investment grade in April
2019. That was the material de-risking
of the business - because we were a
big player, we needed to be investment
grade if we wanted to continue to
grow. That was the Holy Grail.
So, now the business is humming,
it's making a lot of money, it's
perceived and rated as probably the
best run aircraft leasing company
in the world, not just in terms of the
types of aircraft it invests in, but how
it manages its people and its culture.
This was deliberate and has always
been at the core of my management
philosophy. We challenged our
people to be the best at what they
did, but we were also innovative in
so many ways around our global and
corporate responsibilities around
thought leadership. I have no doubt
that attracted the best and brightest
to come and work for Avolon at a
crucial time when we were essentially
doubling the size of our global teams.
We as a management team, and
a number of my other co-founders
who'd come from RBS, had always
agreed that our time as leaders should
be finite, for several reasons. One
is a fundamental belief that our job
was always to breed the next layer,
to have a succession plan always
in place. Second, I fundamentally
believe that any leader has finite
relevance. So by the time Avolon had
secured investment grade, that clock
was ticking.
In September 2019, I took the
ExCo team away and told them it
was time for me to go, to be met
with a similar sentiment from John
Higgins and Tom Ashe, my president,
chief commercial officer and chief
operations officer since the first day of
Avolon's existence. They also felt their
time in Avolon was drawing to a close.
ISTAT Jetrader - Spring 2023

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