Equity funds more cautious about entering shipping

Is reality catching up to the private equity funds' euphoria about the shipping industry? Equity funds participated in just 15 major transactions during 2014, compared to 30 last year, according to Marine Money International.

Photo: Colourbox

The private equity funds' entry into shipping during the low-point of the financial crisis since 2008 looks to have moved past its peak. Several of the funds seem to have underestimated the volatile and capital intensive shipping industry, which will make it difficult for many of the funds to exit the market within their typical investment horizon of around five years in a market characterized by severe overcapacity and low rates several years into the future.

A survey among numerous analysts, published by South China Morning Post Monday, shows that the private equity and hedge funds filled a major capital demand gap in the shipping industry when many banks hit dire straits following the collapse of Lehman Brothers in 2008, but for the funds expecting a quick exit within 3-5 years and a 15-20 percent return on their investment in ships at historically low prices, things are not looking too good.

Read the whole article

Get 14 days free access.

No credit card is needed, and you will not be automatically signed up for a paid subscription after the free trial.

  • Access all locked articles
  • Receive our daily newsletters
  • Access our app
An error has occured. Please try again later.

Get full access for you and your coworkers.

Start a free company trial today

More from ShippingWatch

Ørsted wants Maersk as customer in green methanol project

Energy company Ørsted has just bought 45 percent of Swedish Flagship One, which is set to produce green methanol for the shipping industry as of 2024. Ørsted's head of hydrogen wants Maersk as customer in the large scale project, he tells ShippingWatch.

Singapore names its biggest bunker suppliers

TFG Marine, a bunker company founded by two John Fredriksen-controlled carriers and commodity trader Trafigura, is among the five biggest bunker suppliers in Singapore in 2021. See the list here.

Record number of ships passed through Suez in 2021

Despite the blockage in the Suez Canal during spring of last year, the crucial waterway set a record for the number of ships passing through in 2021, reports Bloomberg. The canal is expected to complete an expansion by the middle of next year.

Further reading

Related articles

Latest news

See all jobs