Investec will launch a $500m (£316m) fund to invest in aircraft debt later this month, which the specialist asset manager claims is a world first.
Investors are piling money into the fund, which will effectively fill the gap left by major banks. Since the financial crisis, major banks have been lending to the airline industry at less attractive rates.
Ramki Sundaram, the former chief executive of Mumbai's now-defunct Air Deccan, who heads Investec Aircraft Finance, told the Independent on Sunday that European pension and insurance funds are among the institutional investors.
He added: "Investing in aircraft gives a very good risk return to institutional investors and we will be looking at senior and mezzanine debt for aviation. This is the first time that this has been done – not just in the UK – and it's taken a few months to get this into place."
The aircraft finance division has previously raised two equity funds, worth $1bn and $650m. This money is used to buy aircraft which are then leased to major airlines, including Qantas, Air France and Air China.
Investec is looking at raising a third of these funds by the end of the year.
"We've had enquiries about another fund. It's on the drawing board," the firm said.