Call to the Bullpen: Labrozzi Comes Back to Aircraft Finance at Global Jet Capital
by Phil Neuffer Monitor 100 2016
Fewer than two years after retiring from GE, Dave Labrozzi is back in the thick of things with Global Jet Capital, the aircraft finance firm that acquired GE Capital’s corporate aircraft portfolio earlier this year. As the team from GE Capital and the legacy staff at Global Jet Capital continue to merge, Labrozzi and the Global Jet Capital leadership are charting a course for international success.
About two years ago, you could find Dave Labrozzi on a beach enjoying retirement. While Labrozzi was working on his tan, GE Capital was still the 800-pound gorilla, which included its corporate aircraft portfolio.
Today, Labrozzi is chief operating officer of Global Jet Capital, the same company that completed the acquisition of GE Capital’s corporate aircraft portfolio in February, just one of numerous sales the industrial giant has made since announcing its plans to sell off non-core business units in April 2015.
Back to Work
It has been nearly half a year since Global Jet Capital closed the deal with GE Capital, and even more time has passed since Labrozzi traded his swim trunks for a suit. But how did he transition from the beach back to the office?
Labrozzi retired from General Electric in 2014 after spending 35 years with the company, 25 of which were with the corporate aircraft division. During his brief time as a retiree, Labrozzi would often get calls from close friend Shawn Vick, who had launched a new company called Global Jet Capital in October 2014. Labrozzi and Vick’s relationship spans more than two decades, including time served together on an advisory council for the NBAA.
When Vick would check in, usually every couple of months, it was not just to say “hello.” Instead, he offered a simple pitch, “Are you done with retirement? Do you want to work with us?”
For the first year and a half, Labrozzi laughed his friend off and said he was just fine being retired. Then a call from another old friend came through. This time it was GE, Labrozzi’s former employer, asking him to help with the sale of its corporate aircraft portfolio where Labrozzi had dedicated the majority of his career. It was only at this point that Labrozzi became aware GE was discussing a sale to Global Jet Capital.
With his former team and portfolio being sold to a company founded by a person he had worked with for so many years, Labrozzi finally stopped laughing off the idea of coming back and joined Global Jet Capital after it closed the GE acquisition.
“What brought me back was not only the whole GE portfolio and the GE team, but the relationship with Shawn that goes back 20 years,” said Labrozzi. “Shawn and I are used to working together and trying to work with common customers — an airplane he was trying to sell and a customer that needed financing or leasing. That was one of the attractions of coming back into the workforce.”
In the months following his return, Labrozzi has helped position Global Jet Capital for the future. One of his and the company’s primary objectives has been not only to assimilate the team that joined from GE with the legacy staff of Global Jet Capital, but to expand that team throughout the world. After all, the company’s name is Global Jet Capital, and that international focus is something Labrozzi and the rest of the leadership take very seriously.
“We have been hiring a lot of people. We’ve been putting people around the world for origination purposes,” says Labrozzi. “We have hired people to help us underwrite new business, manage the portfolio and that goes through not only your traditional customer facing positions, but also in the area(s) of finance, legal, corporate controls and compliance.”
The personnel initiative is partially driven by the portfolio that was acquired from GE, which Labrozzi values at approximately $2.5 billion. Though mostly based in the Americas, particularly the U.S., Canada, Mexico and Brazil, there are other areas of interest and potential for expansion.
Labrozzi says Global Jet Capital has made staff additions in Brazil and Mexico and is currently attempting to hire people for origination functions in Western Europe, the Middle East and Africa.
“Basically, any place around the world, if there is a developed corporate aircraft market, I want to have people on the ground being a face to customers, sales distribution and a support channel,” says Labrozzi.
Flat Tire on a Moving Vehicle
Adding to the talent pool is one of a number of priorities on Labrozzi’s plate. Perhaps a more pressing one is building out a true leasing operation system. Labrozzi likens Global Jet Capital’s current status to that of a car driving down the road with a flat tire but without any intention of pulling over to change it. In this way, Global Jet Capital’s leadership is leaning out the car window to fix the tire on a vehicle that is charging full steam ahead.
“We are making significant investments in not only people but systems architecture, accounting systems, lease accounting systems, bill and collecting capabilities, legal infrastructure, corporate infrastructure — we’re doing all that right now,” says Labrozzi. “Making big investments for the long-term buildout and operational success of the business, that’s the challenge right now.”
That challenge and any others that arise will be approached in a philosophy very familiar to Labrozzi, who says that the culture at GE is already embedded at Global Jet Capital. That culture is built on being decisive, facing reality and taking action when a problem arises. Unlike GE, however, the size of Global Jet Capital allows for greater oversight by a larger percentage of people in the company, something that separates the company from others in the marketplace, according to Labrozzi.
“I can walk down the hall to our CFO, our pricing leader or our general counsel and we can make decisions very quickly,” says Labrozzi. “So it’s enabled us to not only have, in my view, those very required operating enablers but to be able to do it in a more nimble fashion just because of size.”
While the assimilation of the new team with the old has gone very well for the most part, Labrozzi is not blind to some of the internal challenges that come with getting two new groups on the same page. Nonetheless, he remains optimistic about the team’s continued dedication to interlacing and remaining focused on the road ahead.
“I guess this is probably evident in any merge/startup type entity, but we’re still trying to find a better way to communicate with one another, and it’s hard,” Labrozzi says. “We’re trying to change the tire of the car as we’re on the road, but I look around at the talent that is in this company collectively, from both sides, and I just couldn’t be prouder of the associates I have been fortunate enough to be tied to here.”
With a bolstered portfolio and a continually expanding and improving talent pool, what else separates Global Jet Capital? For Labrozzi there are two answers.
First, Global Jet Capital is singularly focused on the aviation industry. Second, the company is supported by a number of financial sponsors, including GSO Capital Partners, Franklin Square, The Carlyle Group and AE Industrial Partners, who understand the industry and are committed for the long term.
“We also have the benefit of incredibly strong financial sponsors who are in this for the longer term. Our sponsors are very familiar and have experience with aviation,” Labrozzi says. “We’re a corporate aviation finance business. We don’t also do trucks and trailers and machine tools and corporate lending and everything else that has different complexities to them. The mission is very straight forward.”
The challenges of the here and now are easy to predict, but forecasting what’s to come in the years ahead and mapping out a road to success is not as simple. Labrozzi says Global Jet Capital has extremely ambitious growth plans and much of that has to do with keeping to its namesake and continuing the worldwide expansion it has already begun.
“We intend to originate the right kinds of deals with the right customers and the right types of airplanes in every major market around the world,” says Labrozzi. “What I would really find success in the rearview when I look back is when we have become the lessor/lender of choice for the sales channel around the world that have a customer who wants to own and operate an airplane and needs a creative way to smartly use its capital.”
As far as the aircraft finance industry in general, Labrozzi doesn’t see much difference between its success and that of the global economy. As he explains, demand is created by corporate profits and world growth GDP, which have been a bit off kilter of late. Getting back to a growth environment on an international scale is paramount to continued success for not just Global Jet Capital’s industry, but all industries.
“I don’t think that as an industry, be it corporate aircraft or equipment in general, we’re any different than the global economy. Our boat will rise and fall with the tides. We’re all hoping for a better day when businesses can grow again because the world’s doing better,” says Labrozzi, who has begun to see some reasons to be hopeful. “In the short time I’ve been here, we have quadrupled the amount of total deals we’re looking at in terms of numbers and dollars at any one given time because we’re seeing not only more people put on the ground and finding more opportunities, but I think there are more opportunities coming.”
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