More Asian investors in search of yield at a time of currency devaluation are expected to be drawn to the U.S. dollar-based business of aircraft leasing, taking a leaf out of the playbook of Li Ka-shing and Cheng Yu-tung.

Robert Martin, the chief executive of BOC Aviation -- Asia's largest aircraft leasing firm -- and an industry veteran, told the South China Morning Post: "We are seeing a trend emerging of more and more large Asian investors getting involved in this market, starting with Cheung Kong last year, and then Chow Tai Fook, and then Bohai Leasing's bid to acquire Avolon Holdings."

Bohai Leasing, a unit of HNA Group, is seeking to buy one of the largest western leasing firms in a landmark US$2.6 billion deal as part of a global expansion.

Unlike airlines that are expected to suffer losses from weakening Asian currencies, aircraft lessors, which have dollar-denominated revenues, are a good bet for investors seeking shelter from currency risks.

Aviation consultancy Flightglobal's Asia finance editor Ellis Taylor said: "There is increasing appetite [for aircraft leasing] throughout the Asia-Pacific. That's probably where the next big wave of U.S. dollar capital is. Particularly for sophisticated investors, with the currency devaluation they get the benefit for holding U.S. dollar assets."

Good investor appetite is in turn expected to keep the cost of funding low for leasing firms. BOC Aviation on Monday reported a 5 percent rise in first-half profit to US$171 million on an average cost of debt of 2 percent, lowest among its peers. Its fleet has grown to 256 aircraft totalling US$12 billion, making it the fifth-largest in the world by value.

Martin said the firm managed to raise US$1.8 billion in unsecured new financing in the first half and that its bond financing this year had risen to US$947 million, including bonds issued in Singapore dollars, yuan and Australian dollars, for their arbitrage opportunities.

"Currency movements for us is really just a currency arbitrage question," he said. "We raise our financing in U.S. dollars, or, when we raise it in another currency, we immediately do a swap back to U.S. dollars.

"So the [yuan] itself does not affect us, but the question is, when it moves against the U.S. dollar, would it offer interesting arbitrage opportunities?"

Arbitrage opportunities usually occur when the currencies strengthen, or are expected to strengthen, against the U.S. dollar. Martin said he was not seeing that with the yuan in the second half, with its weak outlook.

He said BOC Aviation might in the second half tap the syndicated U.S. dollar loan market in Hong Kong or Singapore, where supply was abundant at the moment.

"We are getting increasing inquiries from large family-owned companies and from large Asian corporates looking to invest as they realise now there is good opportunity compared with property or other local-currency investment options," he said.

Cheung Kong's US$2 billion move into the leasing business in November last year by buying an aircraft portfolio with leases attached was typically how new investors entered the market and grew their business, Martin said.

Acquiring a whole aircraft leasing company was another option, he added.

Cheng, through his companies Chow Tai Fook and NWS Holdings, owns leasing firm Goshawk Aviation with South African bank Investec. Goshawk is expected to have 50 aircraft by the end of this year.

Accipiter Holdings, the Dublin-based company Cheung Kong set up to run its leasing business, has 44 planes on lease to 22 airlines, according to its website.