You are here:  Home  >  News  >  Current Article

$5 Billion private equity and hedge fund investments put into shipping

By   /   February 20, 2014  /   No Comments

Shipping debt among the private equity and hedge fund sector has risen at its fastest rate since the sector opted to take on loans from banks two years ago, meaning the firsts may eventually own the vessels.

Over the last 12 months, approximately $5 billion in shipping loans has changed hands according to New York fund manager AMA Capital Partners LLC’s estimates.

Such high demand from investors has begun driving prices up to 90 cents on the dollar, from 70 to 80 cents in 2013.

$5 Billion private equity and hedge fund investments put into shipping

$5 Billion private equity and hedge fund investments put into shipping

This is indicative of a broader shift in debt patterns as investors take on debt which has been abandoned by banks after regulations were introduced to stop repeats of post-crash taxpayer bailouts.

Hedge funds seem to be putting faith in the recovery of shipping markets in general after they crashed 71 per cent to historic lows half a decade ago.

If the downturn does continue, many funds appear to be willing to do something which banks have been unwilling if a debtor defaults – literally take over the ships.

“The markets are flush with liquidity in terms of investors looking for homes,” said Randee Day, the president and chief executive officer of Day & Partners LLC, an advisory and consulting firm specializing in shipping, who ran JPMorgan Chase & Co.’s shipping division in the 1980s. “If I was still managing a portfolio at a bank, I’d be unloading like mad.”

    Print       Email

Leave a Reply

Your email address will not be published. Required fields are marked *

View the full INDEX:FTSE chart at Wikinvest
  • Latest News

    Profile: Ray Dalio

    Ray Dalio

    Industry surge not enough to propel macro hedge funds

    macro hedge fund management

    Private equity interest in mining rises

    GlobalHealth insurance company acquired by New York private equity firm

    GlobalHealth purchased by private equity firm

    Real Estate Hedge Fund News

    real estate markets graph

    Forbes announce their top five hedge fund managers

    George Soros number one hedge fund manager

    February indices – large scale swings and low interest rates in Europe

    February Indices news

    Profile: James “Jim” Simons

    Private equity lawyer joins Willkie Farr in New York

    Kirk Radke joins Willkie Farr & Gallagher