Analysts: The pitfalls of private equity funds

The banks’ reluctance to borrow money has paved the way for an influx of private equity funds in shipping. This can be a good solution, but there are certain questions that can plague the cooperation between the shipping company and the investor, according to analyst agency McQuilling.

Capital for risks can be a fine alternative to the bank loans that have diminished significantly during the years of crisis. But there are certain pitfalls to be aware of, as a shipowner or investor, according to a brief by analyst agency McQuilling.

“Establishing a successful strategic partnership with a private equity fund will depend on the objectives of both parties and the contributions that each is able to provide. The biggest question that comes up between the two parties is control. As the private equity investor is likely putting up the largest portion of the investment, typically they will require a corresponding portion of control over management,” writes McQuilling.

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