Pavel Chernyshov, co-founder of new shipping investor Arkview Capital, is a believer in disruption and finding that little niche that everyone else is neglecting.
He set up the US private equity fund in 2020, with Joon Chang and Vijay Mehta, all alumni of the family office of the billionaire Ziff family.
Arkview hit the shipping headlines earlier in October, when it teamed up with shipowners MSea Group and Scorpio Tankers to set up Clean Sea Transport (CST) by buying Sweden's Marinvest and its fleet of dual-fuel methanol tankers, plus conventional LR1s.
Chernyshov and MSea founder Modi Mano go way back, to when Mano helped set up Navig8 Group.
"I've known Modi for a long time, since his Navig8 days," Chernyshov told TradeWinds.
"He's a great operator. Having a long-standing and trusted relationship with the operator is key for investors."
Change is slow
One spur to the Marinvest deal was liner giant AP Moller-Maersk ordering up to 12 methanol-fuelled containerships in the summer.
Chernyshov believes that in shipping, fundamental changes happen very slowly, much slower than any of the pundits predict.
"In my opinion, a commitment from Maersk [for] methanol-powered vessels offers clues about where the industry is headed," he said.
"Fortune 500 companies are committed to reducing their emissions footprints. Methanol-powered transportation infrastructure provides an amazing opportunity to accomplish that goal."
Chernyshov spent a decade at the Ziff family office, running the private equity portfolio.
Dirk, Robert and Daniel Ziff are the sons of American publishing magnate William Bernard Ziff Jr. They inherited the family fortune in 1994 and formed Ziff Brothers Investments (ZBI) in New York.
Shipping was one of the sectors Chernyshov pursued for ZBI, although he will not reveal details.
"Shipping is interesting because at any given time, there are sub-sectors in dire need of capital," said Chernyshov. "But making profitable investments in shipping is about patience."
Arkview Capital is a generalist fund, not a shipping fund, he explained.
The fund is focused on investing in areas where capital flows are inefficient or disrupted, the co-founder added.
He argues that one consistent approach to producing attractive returns is to back businesses ignored by the rest of the investment community.
Converting the sceptics
"When you're working on an out-of-consensus investment, sceptics surround you. Having a real vision helps you cut through the noise," Chernyshov added.
He told TradeWinds that Arkview plans to grow the CST platform.
"Partnering with the largest methanol producer, Methanex, provides a unique opportunity to expand our transportation capabilities," he said.
CST has said it could move into methanol-powered boxships and bulkers in the future.
The five methanol carriers are on long-term charters of up to 15 years with Waterfront Shipping, a subsidiary of Canada's Methanex Corp.
Waterfront also owns a 50% share of each tanker.
Arkview's website says its target equity investment is between $10m and $30m, with ownership shares in the 25% to 75% range.
The fund has a long-term investment horizon of up to 10 years, compared to the usual private equity window of up to five years.
