David Power - Solus Capital | AviLease | Aergo
In this, episode of Flightpath with Alok, we hear from David Power, a much-respected figure in the world of aviation leasing. David currently holds multiple board and advisory positions within the aviation sector. These include being, a special advisor to Aergo Capital; Vice Chair of the Advisory Board - The Hague Court of Arbitration for Aviation and Chair of Technical Standing Committee; Board Member of AviLease; Founder and Principal of Solus Capital Partners, and Chair of the board at FADO an Irish manufacturing company. Prior to this, David was the Chair of Orix, Hong Kong. David held the position of Orix Aviation CEO until 2019, crowning a career with the company, spanning more than twenty-six years. David grew ORIX Aviation from a small 20-aircraft lessor to an Asset Management powerhouse and top 10 lessors. At the time David left Orix, it owned and managed a fleet of approximately 300 commercial aircraft, worth US$12bn as well as a 30% stake in Avolon, a top three Lessor. David talks to Alok about his early years, what it was like growing up in a rural setting on the west coast of County Clare, Ireland, his early career and studies, and how he found himself on the path of aviation leasing. David speaks openly about the highs, lows, and successes of his career. And, David’s professional experience certainly demonstrates the level of variety and longevity a career in aviation can offer to the next generation of young executives, possibly considering their own careers and whether aviation may offer them the opportunity, purpose, and fulfillment they are seeking. #assetmanagement #aviation #aircraftleasing #aviationfinance #flightpath #alok #flightpathwithalok Linkedin: https://www.linkedin.com/in/alokanand23/ Watch our video podcasts here: https://www.youtube.com/flightpathwithalok Instagram: https://www.instagram.com/flightpathwithalok Podcast: https://linktr.ee/flightpathwithalok Produced & Distributed by Spooler https://www.spooler.in Transcript: Alok: David, welcome to the show of this podcast Flight Path with Alok. This is the fourth episode I'm recording and I'm very grateful and thankful for your time, which you have especially made to join me today. You are in Portugal right now, morning 9am for you and I'm recording you all the way from India. So, let's get right into it. Just to know, if you can just tell me a little bit about yourself. I know you have been in the legal field in the very beginning of your career, right? And so I would just like to understand how you got into aircraft leasing. What has been your background? Where are you from really? A little bit about that. David Power: Great, thanks, Alok. Good to see you. Good morning. And, you know, it's great. Technology is fantastic. Now we can have a proper fireside chat conversation. You're in Bangalore and I'm in Portugal. So, you know, the joy for technology. But yes, I did. I started my career as a solicitor and I trained in Dublin, Ireland, and I worked for a large firm called McCann Fitzgerald. And it was one of the top two or three firms in Dublin at the time. And I went to school in Dublin, but I grew up in West Clare, actually west of Shannon, which would have been just west of GPA, where GPA, Guinness Peace Aviation, one of the first aircraft lessors started in the late 1980s, 1985, 1986. And I grew up in a very rural part of the west of Ireland where there were not too many roads. A lot of singing and dancing and a lot of Gaelic sports and you know, a very, very nice place, but very rural and very poor actually at the time. And I was close to the Shannon Free Industrial Zone and that was the start of aircraft leasing and actually many other businesses that now form, not those businesses, but subsequent businesses that formed the core of the success of Irish society and Irish financial services. So there's a long and rich tradition, both of musical and heritage and young people and people going to the American US and then the Shannon Free Zone, and then ultimately the Dublin IFC growing out of that environment and Guinness Beat Aviation and the start of aircraft leasing. But back to myself anyway, that's a long, long way around. I grew up in the west of Ireland and then my parents moved to Dublin like almost everybody else. And I went to university in Dublin. I didn't study law though. I studied accounting, finance, maths. I got a bachelor of commerce degree. And during that degree I had to do a law module and I discovered that I liked it. So I sat night time exams, to do the solicitors exams. And I passed them and I got my apprenticeship or traineeship with McCann Fitzgerald. And then they, by coincidence, worked for Aer lingus. And Tony Ryan had left Aer lingus to set up GPA and they were acting for GPA. And given that I was not a lawyer as such, so I was an outsider to the lawyers because I had to be gone. I didn't do a law degree, but I'd passed the law exam. And this was good for McAnviss Herald, as they saw it at the time, and placed me immediately into the aircraft leasing section. So I grew up as a baby in aircraft leasing, basically, carrying various people's briefcases, learning how to draft documents, and learning about corporate debt facilities. And actually, I remember one of my first tasks was a task probably nobody wanted to do, but I thought it was great. It was great to be innocent and young. Like it's great to be young because you don't really sometimes understand things. So I was doing the worst job in the world, which to me was the best job in the world, which was going out to all the countries in the world because they had a corporate debt facility at GPA. Actually at the time it was even massive and it was almost a billion dollars. It was NatWest and Chemical Bank and others. And this was in the late 80s. It was, I think, it was extended from 800 million to 1.2 billion. So I put it in perspective, it was a big business even then. And my job was under Catherine Dean at the time. I think you know Catherine Dean. And she was chairwoman of, or I should say chairperson of McCann Fitzgerald. I don't know if she, maybe recently, I don't know if she still is, but she was directing me. I had to go out to all the countries with a questionnaire. and find out what the legal system was like. So India, China, you know, Saskatchewan, South America, you know, Brazil, places that were barely, you know, and that I'd barely heard of that were on my world map, my Atlas, you know, we had Atlas's then and we had Globes and things, you know, and so that was my job, go out to all of these countries, do a questionnaire, find out what the legal system's like. and get the legal opinion for placing aircraft in those jurisdictions. So a very, very great introduction to the world of aircraft leasing. I was also doing stuff like I specialized in tax for a while. So it wasn't all aircraft leasing, but one, I remember one of the jobs I had was to find out where, you know, I could set up companies with no capital tax. So I found out a great country, a great place is called Manitoba, Saskatchewan. And then you got Isle of Man, and you got Guernsey, and then of course you had Sartre and other places like that. Because at the time people were able to double or triple dip aircraft. So you could buy an aircraft one place, you could sell it to another place, you could lease it to another place, but you might get three sets of capital balances. Of course that was legal and permitted at the time, of course all of those things have changed. Another big part of my job was going to Sweden. with Mike Dolan and Mark Pearson and people like that. Mike Dolan passed away, may he rest in peace, and they used to sell the aircraft into Swedish investors. So very early on I was getting a broad taste of how aircraft leasing and financing worked. Alok: So David, through your career path, as I mentioned, after Audix, you moved on into various roles. And what you're currently doing is you're working as a member of board of directors of AV Lease. And I think you're also a special advisor in Ergo Holdings and principal in Solus Capital Partners. Right? If I may just request you to just give us a little understanding of your role in these organizations AV Lease, Ergo Capital, Solus Capital, that will be great to know please. David Power: Great, thanks Alok. So AV Lease has been set up over a year by the PIF of Saudi Arabia and it's a really exciting company. It's being run by Ted O'Byrne, who you know from Carlisle and from Air Cap days and it's growing very rapidly with a regional focus in the first instance and then a pivot internationally. Really proud of my involvement with that company and on the various committees audit committee, remuneration committee and transaction committee there and I think it's a company with great prospects and future obviously very well capitalized and looking forward to the growth there. With Ergo Holdings, I'm an advisor and given my background in asset management, I've set up for Ergo their asset management division. Historically, actually it goes back to your first question, historically there were balance sheet lessor managing funds for their main investor, which was Carval and now they've pivoted to be an international asset management company. And actually since then we added about, there's been added in the last two to three years, 6 billion of assets. So it's a very significant growth within Ergo, 4 billion of which are assets under management. So a very, a period of very strong growth. Solace Capital is an asset manager in the wealth management fund and I set it up in 2016 before I left Rx and it basically provides asset management and fund services as in It has set up a number of investment funds, particularly in Malta and it's UK regulated. And I'm the principal of that company. I founded it and we'll see where that goes. So far, so far it's still going good, which is, which is, which is good. And then there is the arbitration court issues as well. Alok: That's excellent. It looks like you have 48 hours in a day, not 24. David Power: Yeah, Alok: That I can say already. David Power: yeah, well, it's Alok: You do so many things, you David Power: important to time yourself Alok: know. Yeah. Yeah. David Power: as well. I mean, you can play a role, but not In some occasions be too much in the weeds either. So it's important to have the right perspective. Alok: Another thing which came to my notice was that the in your I mean, the since I have known you when I remember first meeting you were in Aurex Aviation. I remember how kindly you took out time to meet me a few times when you were the CEO in Aurex. And one of the things which stood out for me over last few years is a lot of the if I may say so the alumni, you know, in quotes of Oryx have spread out all around the world in some very important, I may say, leadership positions in different leasing companies and in the industry. So, it seems like Oryx aviation of that time was a great breeding ground for future leaders. And obviously, for me, in my mind, the connection is there with you being at that time, the lot of people whom I meet in the industry now have worked in some form or other under you directly or indirectly. So David Power: Yeah. Alok: I would like to know what do you think was the reason what what was unique one of the things possibly I can think is Oryx was an early starter in the industry obviously but other than that you know what played a role in shaping up these future leaders what do you think was was happening what was the secret sauce really which helped to groom these leaders. David Power: Yeah, so I'm really pleased you asked that question. So I can quote a fact, which is that there are currently five CEOs of aircraft lessors who worked for me or with me in RX. So I think that's a pretty good track record to have. And I do think we did have a secret sauce. So let me take you back a bit before I answer the question to go to what is that secret sauce. Not so secret, but probably a combination of things that collided. When I became CEO of Oryx, I spent some time in asset management, in finance, and I spent a lot of my time working with technical people. One of the things which I really enjoyed in my career, and I enjoyed it intellectually and physically and mentally, was to be with technical people, engineers. Now, of course, I'm not an engineer and I don't think like an engineer. I hope I don't look like an engineer. I mean, as a pen, I can put in my pocket and I could imitate one. But we had great fun. And the fun we had was because we were different. So an engineer and a finance guy and a marketing guy, they're three different things, you know, they're chalk and cheese, really. And what I enjoyed, though, was when I was working with the engineers was we would be drafting the detail of return conditions or say an engine shop visit or say the maintenance reserves provisions. And there's big shifts in money in this and I think that I was lucky early on that I recognized and was part of drafting some very complex engine agreements and other things and I understood both the marketing implications and the financial implications, and I could translate for my technical friends, you know, and I had some really great people that I worked with, but I could translate their words and concerns and risks and opportunities into contracts. And I think that was a great foundation for me to become a CEO in the aircraft leasing space. And when I did, I set up a strong, separate asset management team, not reporting to finance and not reporting to, you know, slightly separate outside the core finance team so that we could manage technical. Alok: Was it something which was unique at the time? Because now it is that is how all the leasing companies are mostly now right or is that something which was a different thing to do at that point of time? David Power: Yeah. Well to be honest with you, when I didn't, another point that came up in some of the other
