Exchange funds must keep at least 20% of assets in qualifying illiquid holdings to preserve tax-deferral status under Section 721. Instead of real estate, Craft satisfies that rule with an operating fleet of business jets that generate charter revenue and potential asset appreciation.
How we finance the aircraft
New or pre-owned jets enter the fleet through two credit channels.
Aircraft-backed loans secured by the airframe and its related engines.
Asset-backed loans that let the Pod borrow against a portion of the contributed equity portfolio, freeing capital for additional lift without selling securities.
How we allocate flight hours
Annual block time is divided between two sources.
Charter demand from corporate and leisure clients booked through Craft Charter LLC or partner brokers.
Participant usage that draws from the unlocked hours. When participant demand falls below forecast, the Pod can release those hours back to retail charter, turning unused capacity into incremental profit.
Diversification within the charter sleeve
The fleet operates from several geographic hubs, which spreads both market risk and maintenance logistics across multiple regions and customer segments.
Cash flow and upside
Charter revenue arrives as operating income every month, while each aircraft can gain value through market appreciation or life-extending maintenance programs. Together these elements satisfy the illiquid-asset requirement, provide steady cash yield, and create the chance for capital gains at disposition.
For details on what happens to aircraft proceeds when you redeem units, see What happens to my aircraft on exit. For the broader picture of our investment mandate, read Primary investment objectives of Craft Pod and Exchange fund overview.