Pelagic Partners has revealed its latest expansion moves that sees the Cyprus-based shipping investment fund make its first product tanker acquisition.

The move, announced Monday, is in line with that seen by bigger players, who are investing in product tankers as well, in anticipation of a wider market rebound for oil carriers.

Pelagic was set up in August last year. Its founders include Niels Hartmann, chief executive of the Hartmann Group.

"Oil demand is slowly but surely reaching pre-pandemic levels again, and a more complex trade with new product flows has emerged, demanding higher ton miles," Pelagic managing director Atef Abou Merhi said.

"It will not be long before the market returns to healthy levels," added Abou Merhi — a second-generation member of the family that owns diversified Lebanese shipping outfit Abou Merhi Group.

The statements came as part of an announcement that the fund had taken delivery of its first product tanker, the 14-year-old Star Osprey.

The only vessel matching that description, according to reference sources, is the 51,200-dwt Star Osprey (built 2007), which was trading under the same name with the Apicorp Petroleum Shipping Fund — a Saudi joint venture between the National Shipping Co of Saudi Arabia (Bahri) and Arab Petroleum Investments Corp.

Acquired by Pelagic in partnership with Cypriot peers Interorient Shipmanagement, the Star Osprey will henceforth trade in the Norient Product Pool.

According to broking sources, its transfer to its new owners was agreed earlier this year at $11.6m. That would be about the same level as the $11.8m the ship is worth now, according to an indicative valuation on the Signal Ocean platform.

"With the acquisition of Star Osprey, we believe to have positioned ourselves into the right stage in the product tanker cycle, which we are bullish towards for 2022 and beyond", said Abou Merhi.

The acquisition means that Pelagic has invested in its fourth different shipping market after bulkers, car carriers and LPG tankers.

Its main focus has been LPG vessels, of which Pelagic announced on Monday the purchase of another two to bring the total size of its gas carrier fleet to five ships.

As in previous purchases, Pelagic bought the 2,939-cbm sisterships B-Gas Saturn (ex-Ceska, built 2003) and B-Gas Jupiter (ex-Maddy, built 2004) in partnership with B-Gas, a Danish market specialist in that segment.

The two semi-ref LPG carriers used to be Italy's Lumaship fleet — a stable from which Pelagic acquired LPG ships before.

Second fund will be greener

Having completed its initial spending target of about $50m and with a fleet of eight ships, Pelagic said it was closing down its first investment fund and is about to launch a second.

Fund II is to be set off in January 2022, a few months later, than initially envisaged, with a target to attract about $100m of capital. It is to be equally opportunistic and diversified as the first one, but will target younger, more environmentally-friendly ships.

Pelagic promised to file a first ESG report in the second quarter of next year.