Wednesday, October 18, 2017
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‘Risk Takers’- A High-Level View of Shipping Industry Opportunities

Risk Takers. Let’s face it. This is in fact what all investors are.

There is no investment which can bring returns without taking some risk, except one, and that is Knowledge. This is why Fund Managers, Financial Advisors, Wall Street Gurus are highly remunerated and their annual hefty success bonuses exceed the wildest dreams of most ambitious and well paid executives. Bonuses flying at the range of few hundred millions us dollars to one or two billion!

Investors’ usual critical questions are; Where and When? Two questions which demand knowledge, expert analysis and wise answers. Fund Managers and Financial Advisors usually have the knowledge and expertise to know the right answers to these troubleshooting questions.

The last two years they have focused in one of the most profitable but also risky (due to its cyclicality) investment options, which is the Shipping industry! Shipping has been the talk of the day since 2012 as it is obviously a good investment opportunity, now the freight market and vessels values remain at historical low levels.

This is why Private-equity and hedge funds are accumulating shipping debt at the fastest pace since they began buying the risky loans from banks in 2012. It can’t be unnoticed that about us$ 5 billion in shipping loans has changed hands in the past year, according to estimates by AMA Capital Partners LLC, a fund manager and adviser in New York.

Investor demand is driving prices as high as 90 cents on the dollar, from 70 to 80 cents a year ago. Funds are betting ship prices that collapsed as much as 80 percent in five years will rebound from historic lows. Shipping is a tangible and global business.

Investing in Shipping – buying shares in Ship-Owning companies (SVP’s) – is a tax free investment (at fund’s level) and despite the risks involved and asset values depreciation in a bad freight market environment, where the demand for tonnage is low, the vessels always retain part of their value, the scrap value, in case of a distress sale in a catastrophic market or vessel’s age being too old.

Investors in shipping anticipate combining income returns on their investment. One is the income deriving from the trading and vessels management and the other is from the sale and purchase gains when the assets are liquidated at appreciated prices, in a good freight market, where the demand for tonnage is brisk.

In view of high profit opportunities new specialized Private-equity firms have been established, like Starfleet Navigation Limited – teamed by highly experienced shipping and investment professionals- which are willing to take ownership of the assets and put it to work while they wait for prices to appreciate.

Having said that it would be an omission not to mention that in view of the optimism prevailing amongst the funds that are buying shipping loans there few that are less familiar with shipping, if not at all, they are newbies and the risks they take might be proven an expensive lesson.

About Anastasios Maraslis

Mr. Maraslis has 28 years experience in the Maritime Industry and particularly in the fields of Ship Management, Marine Insurance, Investment, Ship Finance, Maritime logistics and International Trading. Lloyd’s List, Trade Winds and other International Maritime Newspapers and Shipping Magazines have published articles about Mr. Maraslis entrepreneurship and achievements.He is the writer of various articles published in Nafteboriki, The Greek Maritime Newspaper, NAYS, ELNAVI, Greek Shipping Magazines and he is the Author of two published, sociology content, books.Mr. Maraslis the last 28 years has partaken into international co operations with major international Organisations in Shipping Industry, Energy, Insurance, and Financial Institutions and until today he is organizing, planning and leading to the future both companies he founded 23 and 17 years ago together with an experienced, knowledgable and committed team of people who share his vision and goals.Mr. Maraslis is married with three children and lives in Piraeus, Greece.

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