Vision Ridge Partners founder Reuben Munger is plotting his next move after working with Norway's Saevik family to electrify its Fjord1 ferry fleet.
The managing partner of the US alternative-asset manager told TradeWinds that shipping is currently one of the "fun spaces" for energy-transition projects, and one which his company intends to work more in.
"I spent a lot of my career as a partner in a global hedge fund," he said.
Just before the financial crisis in 2008, Munger left to start Vision Ridge.
"The key to me was there is a need to transition the economy around the world; how do we survive with 8bn, 9bn, 10bn people?" he added.
"Our view was the key is to get the capital markets to become part of that. You need capital to flow to fund the transition," Munger explained.
That realisation drives what Vision Ridge does, Munger said. The company is active in mobility, power and energy, and agriculture, its three main areas of investment.
Vision Ridge has raised three funds so far and now has a third worth $1.25bn through which to pursue its goals.
Munger told TradeWinds that radical transition is now "much more of the moment".
The group's aim is to build knowledge and expertise and deliver a framework where returns are part of the transition.
"But it's complicated," he said.
"When we go find things that we think are important or that we can invest in, we have context that helps us be the right partner," Munger added.
After taking a 50% equity stake in Fjord1 this year, Vision Ridge is now considering how to leverage this experience to help bigger shipping players like Maersk along the road to zero emissions.
Intriguing vessel projects
"We're pretty intrigued about a few of the things that are vessel-orientated, a mix of technologies and needs that are evolving that has us looking at a series of sectors that might fit pretty well over the next one to four years," Munger explained.
"It just depends on geography, technology or market applications. There's a lot going on, mainly in Europe and also in the Jones Act market as well," he said.
Fjord1 has stable state ferry contracts, but is Munger willing to take a plunge into more volatile and cyclical shipping markets?
The financier said: "We really like the ferry contracts, but we're not averse to figuring out where new capacity or real change is going to take place.
"There are a couple of different trends, where the right application of batteries can make things more emissions-compliant and more economically efficient," Munger added.
"There's good economics there. It's just what's the way to deploy and are you retrofitting vessels or are you adding to vessels?" he said.
Vision Ridge is looking at areas where the current global vessel fleet is not well adjusted to solve the question of how offshore growth is going to be catered for.
US offshore wind need ships
"How is the US offshore wind market going to get dealt with? It's clearly a growth market — it's going from zero," Munger said.
On the terrestrial side, solar and wind have become "quite economic" after growing in scale, the financier added.
Shipping is now at the start of that journey, Munger said.
Of the new $1.25bn fund, he added: "We've found an ability to bring investors alongside us. We have pretty significant capacity."
Vision Ridge is looking to identify the three or four building blocks that will be the foundation of the kind of gigantic change that needs to start taking place.
A lot of work to do
This could happen by the middle of the decade, Munger believes. "That's what's striking and fun about shipping, there's just a lot to do," he argued.
With some of the bigger actors such as Maersk having started to make verbal commitments on emissions, the question becomes how to "actualise" that and how Vision Ridge can build its own expertise to be the right partner for the right people as the industry evolves.
Munger has even been reading TradeWinds to get a handle on the industry.
Referring to shipping's leading news provider, he said: "It's learn from you and watch this space. We poke around in the publication and try to figure it out!"
