With banks pulling back, EnTrust Global is looking to buy in.
The New York financial firm — whose Blue Ocean Funds arm is active in the maritime space — closed on its acquisition of Oslo-based Offshore Merchant Partners (OMP) earlier this month as it hunts for new deals in Scandinavia.
Speaking to TradeWinds, EnTrust maritime head Svein Engh and OMP chief executive Ivar Myklebust said the region was one of the last to see banks pull back from shipping, forcing owners to find new sources of capital.
“Here in Scandinavia, it’s probably the last region that has felt this contraction going on, because it’s been such a strong global hub for financing the maritime industries,” Myklebust said during an interview at OMP’s offices.
“But it’s here as well now. You’ve seen stable lenders to ... everything that has to do with hydrocarbons, including [exploration and production] companies, they will start to feel the pinch. Not because their business is bad, but because of policy decisions taken in boardrooms or shareholder levels.”
Data from Petrofin Research shows the shift.
In 2013, the top 40 banks provided $401bn to the shipping industry, good for 86% of total ship financing.
Then, DNB was the world’s top lender, with a portfolio of nearly $30bn, while Finland’s Nordea — an amalgamation of banks with Scandinavian roots — lent just under $16bn.
By 2023, total lending cratered to $289bn, with Petrofin noting the growth of the global fleet was powered by lease financing, alternative lending, private equity, public markets and investors.
DNB’s portfolio had shrunk to just $5bn, on par with Danske Bank and Danish Ship Finance. Nordea leapfrogged DNB but had slashed its portfolio to just $7bn.
Sweden’s SEB had joined the fray but was likewise modest with $5bn.
“We felt that we could go in, provide capital to a market that was starving for capital, but just do it differently in terms of pricing and also structuring,” Engh said on the founding of EnTrust.
“Every time something happens, like the pandemic or the war situation, the banks kind of freeze up a little bit, whereas we just keep working right through.”
EnTrust’s Blue Ocean Fund has already invested more than $3bn in shipping, financing more than 300 vessels and owning more than 130.
In 2021, it took control of Maas Capital, a lender previously backed by ABN Amro and based in the Netherlands.
With the OMP acquisition, first announced in February, Engh is focused on finding deals in Europe’s north with an experienced team with their ears to the ground.
OMP itself has deployed some $700m in credit.
“These guys are very much ingrained in the market,” Engh said. “It’s harder for us to get deep in the market being a US-based firm.
“We’ve done some of it, but not as much as we’d like to do. That’s why we thought this was a very good march for us.”
He spoke highly of the team EnTrust was acquiring through OMP. Both he and Myklebust had banking experience working for one of Nordea’s predecessor banks, he said, and appreciated the analytical approach OMP takes.
But at EnTrust, investment decisions are made by a triumvirate of managing directors versus the bureaucracy seen at major banks, allowing the firm to close on deals quickly.
“We even worked together on a potential bid already,” Engh said.
When might it close?
“Watch this space, as they say,” Myklebust said.
