Dutch shipping fund NBZ has revealed an ambitious plan to boost its investments to as much as €50m ($54m) over the next few years.

It has started the process by strengthening its capital base through the issue of new shares worth €2.5m.

This could be expanded to €4m during the current round.

The issue price is €5.25 per share, against a trading price of €4.95 on Monday.

Net proceeds will be used to expand the investment portfolio, creating economies of scale and thereby improving returns, it added.

It is targeting an expansion from a €5m fund to between €20m and €50m over the next few years.

Norway and Netherlands in focus

"We will keep on focusing on a diversified portfolio with shipping projects with employment attached. These investments could be in the Norwegian equity market as well as in other markets," fund manager Focko Nauta told TradeWinds.

NBZ's shipping investments

Short-sea bulkers: <10,000 dwt, Black sea/Mediterranean (6%)

Deep-sea bulkers: 8,500 dwt-35,000 dwt, worldwide (32%)

LR tankers: worldwide (11%)

Chemical tankers: <12,000 dwt, Europe and the Caribbean (25%)

LPG carriers: <10,000 dwt, Europe and Latin America (19%)

Feederships: 2,000 teu to 2,800 teu, Asia (7%)

"We have a mix of Dutch retail investors (about 65%) and experienced shipping investors/owners (35%)."

He added: "We target both [types] for expanding the company, but we expect the experienced shipping investors part to grow faster.

"One of our aims is to create a Dutch shipping investment platform, supported by the Dutch shipping industry."

NBZ currently invests in nine funds, having stakes of between 3% and 20% in vessels, plus one first-priority mortgage-backed loan, covering 20 ships in total. These are tankers, bulkers, LPG carriers and boxships, largely in Norway.

It was founded by Diederik Tjeenk Willink in 2005 and listed in Amsterdam in 2011 - the only Dutch shipping fund to do so.

The company's approach was a totally new concept in the Netherlands at the time.

The shipping investment market there was dominated by limited partnerships with single-ship companies without any long-term employment for the vessels.

The companies were involved in owning mainly Dutch short-sea multipurpose ships.

Term deals required

NBZ describes itself as offering a unique opportunity for individual investors to participate directly through the Amsterdam Exchange in ship investments focused on dividend yield.

Martijn Steenhuis is senior advisor at Dutch shipping fund NBZ Photo: NBZ

It has invested in vessels controlled by owners like Victoria Maritime Trading, Pritchard Gordon Tankers, Nordic Hamburg, Caribe Tankers, Thor Dahl Shipmanagement and Brasgas.

From 2015, NBZ has delivered an annual dividend yield of between 8% and 10%.

It wants to maintain 7% to 10% payouts in cash or stock in the future.

NBZ's investments are often financially structured with security arrangements such as operational and financial leases (supported by long term vessel employment) and/or mortgage security.

It requires long-term charters for the ships it puts money into.

The funds frequently include an exit downside protection mechanism, such as a put option for shareholders, it said.

"Investing in transactions structured with such features should enable NBZ to show good results in good and bad times and reduces the impact of market volatility," it added.

NBZ is overseen by Annexum, one of the largest managers of private equity real estate projects in the Netherlands.