Photo of Trish Smith, Kelli-Ann Sweeney, Edel Brennan, Miriam Brosnan and Elaine Ward-Bopp, Goshawk Aviation Limited and David Nugent, Citi.
The complexity of each of their financings, the volume of payments and a corporate structure with a significant number of asset-owning companies with varying bank account requirements, meant that a tailored, customer-focused, and nimble approach was needed from all of their system vendors, but in particular, their banking partner and treasury management system (TMS). For a small team like Goshawk to achieve this solution in such little time, while competing at the highest level in the industry, is something truly exceptional. Citi, IT2, Leasepoint and SunSystems were partners in this journey.
Headquartered in Dublin, Goshawk Aviation Limited (Goshawk) was established in November 2013 as an aircraft leasing platform focused on building an asset portfolio of young, new technology aircraft with a large and diversified asset-type and operator base. The company is owned by Chow Tai Fook Enterprises Limited and NWS Holdings Limited and currently has a committed portfolio of 112 aircraft worth approximately US$5.7bn.
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Goshawk was established by Investec Aviation Finance so the company relied on Investec’s infrastructure (systems, teams, processes) for the management of its portfolio initially. In the last quarter of 2015, Goshawk began to engage in building its own platform to support its growth into a global top-tier aircraft leasing business, and the challenge was to create a platform that supported treasury, accounting, banking and contract management activities. The primary focus was on creating a solution that was flexible and scalable.
Challenges arose from:
The scope of the project – sourcing and implementing four systems, ensuring that they all delivered on time and interfaced – brought challenges.
A timeline that all system vendors had flagged as very ambitious.
Limited resources – a small project team led the operations project.
Transitioning the information and support activities from Investec to Goshawk required significant due diligence, planning and coordination.
Ongoing business-as-usual, with the demands of a business in growth mode in terms of additional aircraft and variety of financing sources.
The volume and timing of account openings for 110 entities and over 250 accounts (KYC and documentation requirements, across a range of jurisdictions).
The importance of ensuring the company continued to deliver a first-class service to their clients and to meet all their obligations under all of their financings.
The technical solution comprises two complementary host-to-host connections using SWIFT MT940 and XML camt.053 formats. They now have real-time visibility to their accounts and on-boarded the payroll processing from a local bank to Citi using a dedicated host-to-host connection to ensure confidentiality and bulk debit processing to mask transactions on the account statement.
They implemented an interface between Bloomberg and IT2 and receive daily rates into their TMS, which are used to reset their loans and interest rate swaps and feed into their projected interest rate curve.
Winning an Adam Smith Award is a huge validation of the significant scale and success of what we achieved with the implementation of our platform for Goshawk. For our journey to be recognised in such a way makes what we have accomplished that much greater and we are absolutely delighted to be selected as an Overall Winner, particularly in the company of such other distinguished nominees.
The interface between Leasepoint, the lease management system, and SunSystems, facilitates a full file import directly into Sun, without the need for any manual intervention.
Like the majority of aircraft leasing companies Goshawk is a predominantly USD-based company, however they do have cross-currency requirements. It had not been desirable to maintain multiple local currency accounts for a small volume of transactions so they are now leveraging Citi’s cross-currency solution which allows them to process non-USD transactions via CitiDirect from their TMS via the host-to-host connection.
They selected, developed, tested, populated, validated and implemented an entirely new IT platform and integrated system infrastructure in less than 12 months. Goshawk was also growing its portfolio (by 60 aircraft over the last two years), and are now operating at a level where incoming and outgoing cash flows total more than US$45m per month.
Goshawk was also busy raising finance. In 2H16 alone, they closed a US$345m unsecured revolving credit facility, debuted in the capital markets with a US$231m US Private Placement and completed an unsecured US$95m Schuldschein issuance; Goshawk is the first aircraft leasing company and the first Irish company to access the Schuldschein market.
Trish Smith, Operations comments, “Not only did we implement a set of systems that could service our existing business needs, we were also adapting our systems simultaneously to our ever-changing requirements as our underlying business evolved.”
Take the time and put work into the due diligence of system and vendor selection. We never regretted our choice of system or vendor and had put significant time into investigating their scalability, flexibility, commitment and reputations.
Aim for go-live as early as possible, as problems and unforeseen items are inevitable, and the ability to push back a go-live even by a short period of time without affecting stakeholders or the ability of the business to operate normally is a huge advantage.
Go for it, but be flexible – we phased our go-live by splitting our portfolio in two. This was not our original intention, but no doubt contributed to a successful implementation.