When the leaders of Navig8 allowed TradeWinds a rare glimpse inside the group’s inner sanctum in London in November 2018, the theme was change.
The firm, founded by former Glencore traders Nicolas Busch and Gary Brocklesby, had always prized proprietary data.
But now the switch would be to understand that information better, increase transparency and share it with clients rather than hoarding it in-house.
What Busch and Brocklesby could not have guessed at the time was that several of these initiatives would be brought to fruition 18 months later during a worldwide pandemic that left many companies retrenching as they searched for a new way to survive.
Navig8 used the coronavirus lockdown months to trot out a new online app, launch webinars for clients and pool partners, secure a large partnership with trader Trafigura, make its first foray into the LNG sector and spin out a platform dedicated to sharing bunkering information.
It has been a busy few months for the ubiquitous group, which is the world’s largest independent commercial manager.
And as doors now begin to open in shipping and the world economy, Brocklesby and Busch again opened their doors — this time virtually — to share thoughts with TradeWinds on how they have updated the business.
Virtual doors
“The release of these initiatives was never intended to take place during the Covid-19 quarantine period,” Busch said.
“However, the needs of many changed drastically when a large cross-section of our stakeholders were forced to engage in a distant working environment.
“The majority of our investments in technology were aimed at delivering timely, accurate and transparent information, and they became more relevant in a Covid-19 environment.”
Reliance on technology has heightened in recent months, he noted, as people tried to evaluate how tanker markets and individual vessels were performing.
Navig8 offered real-time reporting through the app, relayed market intelligence via webinars and heightened transparency through its vessel evaluation system.
“Our customer base viewed our ability to develop these systems as added value under more difficult working conditions,” Busch said.
The needs of many changed drastically when a large cross-section of our stakeholders were forced to engage in a distant working environment
Nicolas Busch:
A big piece of news came in this month’s agreement with global trader Trafigura to place seven tankers within Navig8’s commercial management platform in a combination of pooling and charters, with the opportunity to invest in the framework.
“We have a close working relationship with a large number of commodity movers, and Trafigura is certainly among them,” Brocklesby said.
“They are an existing pool participant and we maintain a cooperative dialogue. Through a combination of pool participation and time-chartering vessels, we have formed an agreement to expand our relationship. The aim is to maximise the returns of these vessels.”
Busch added that Navig8 has been coordinating with investment partners for years.
“A number of capital providers view time charter exposure as a favourable alternative to hard-asset acquisition or investment in publicly traded equities,” he said.
Investment partners
“Some of the time charter exposure associated with our agreement with Trafigura was offered to Navig8’s investment partners.
“Providing a vehicle to access pure earnings exposure, for a defined duration and with a guaranteed exit, is another example of how Navig8’s interaction with investors has evolved to include different types of shipping investments.”
As TradeWinds reported, the company has revealed the vessels are a VLCC, three suezmaxes, an aframax and two LR2s.
Navig8 grabbed another headline with its first investment in the LNG sector, taking a stake of more than 19% in Oslo-listed Awilco.
The group had considered moving into the gas trade for some time and is for now viewing the stake as a passive measure that will allow it to learn more, although Busch and Brocklesby offered no further comment on that strategy.
Navig8 has a significant record in investing in assets for its own account. From 2013, it spent heavily on VLCCs, product tankers and chemical carriers worth $3bn with mixed results. It then embarked on a 16-unit product tanker newbuilding series at China’s New Times Shipbuilding.
This month, the group’s private investment arm, Oslo-traded Navig8 Topco Holdings, reported quarterly earnings of $47.9m, up from $11.2m a year previously. Revenue rose to $1.06bn from $723m.
Navig8 Topco Holdings owns a VLCC, eight LR2 product tankers, an LR1, 11 MRs and two bunker tankers.
