SevenSeas Investment Fund has teamed up with Klapton Insurance on a financial product to guarantee the future value of its first acquisition.
The Luxembourg-registered fund, set up by chief executive Akis Tsirigakis and chief operating officer Stefanos Michalis in 2018, has placed its 36,600-dwt bulk carrier Frederika (built 2012) under Klapton’s Residual Value Guarantee product.
The vessel was the first acquisition made by SevenSeas in October 2019.
Klapton's product guarantees the future valuation of the Frederika in return for the payment of a premium. Such schemes are common in the aviation and engineering industry but have yet to make significant inroads into the maritime market.
Russell Parker, chairman of Klapton's Maritime Sureties Committee, said: “By providing a floor value for the vessel at various future points in time, Klapton has absorbed a key risk metric for our client.”
Klapton is working together with market intelligence company Marsoft on the value guarantee product.
The future price guarantee of the vessel has not been disclosed. VesselsValue estimates the Frederika is currently worth $9.19m with a projected future valuation of $10.12m after three years.
Tsirigakis has high hopes for the fund and future investments could provide more business for Klapton.
He said: “We welcome Klapton’s innovative approach providing SevenSeas with a capital protection cover safeguarding the asset acquisition investment, via a structure that is an evolution of the residual value guarantee, thus helping SevenSeas Fund in mitigating the risks of maritime investments.”
Tsirigakis earlier told TradeWinds he is aiming at raising $100m to invest in bulk carriers between four and 10 years old and between 35,000-dwt and 65,000-dwt.
A key feature of the fund is that it offers capital protection cover. It also aims to be debt free so it can offer steady dividends to investors.
