John Fredriksen is preparing to celebrate Christmas in London with daughter Kathrine Astrup Fredriksen and his girlfriend, Iranian-born Maryam Mohaghegh.
Traditionally, he has spent the festive holidays with sister Gerd in Asker, Norway. But after his father, Gunnar, died in May, he will stay at home at the Old Rectory in Chelsea, where he lives alone.
“At Christmas eve, we will be with Kathrine, who lives close by,” he told TradeWinds.
And the menu?
“With Gerd, we always had ribs from Eidsvoll. This year, it will be turkey,” Fredriksen said.
And, as he gears up to spend the festive holidays in London for the first time in 50 years, his mind is on preparing his shipping empire for his daughters to take the reins.
The Norwegian shipping tycoon is now organising his group of companies so daughters Cecilie and Kathrine can take over management of the many billions of dollars of assets without having to work as much in shipping and offshore as he does.
Shipping means a tough life, he said.
"Shipping demands that you are switched on 24/7. For me, it is a lifestyle," he said.
"But Cecilie and Kathrine shall not take over this role. We must find a way that they gradually can handle their ownership without having to follow the tanker, dry bulk and rig markets from hour to hour, every day, every year."
Smaller stakes, bigger companies
Fredriksen told TradeWinds that he has always believed in larger companies, such as tanker owner Frontline and bulker owner Golden Ocean Group. Size creates possibilities, he believes.
Shipping demands that you are switched on 24/7. For me, it is a lifestyle
"But, for me, it is not necessary so that our group needs to have full control in these companies," he said. "I do not rule out that we can be one of many shareholders in even larger tanker and bulker companies. The problem is that, right now, I don’t see what companies are natural merger companies for us. But this may happen.”
He added that his group may move towards having smaller stakes in even Golden Ocean and Frontline, which are both listed in Oslo and New York.
“This would be a solution that would make it easier for Cecilie and Kathrine to follow up ownership," he said. "It is a big difference between being a substantial shareholder with other large shareholders than to be the one who decides and is responsible alone.”
More in finance and real estate
A larger part of Fredriksen’s investments are now placed in assets outside shipping and offshore.
The shipping mogul revealed that, in a so far unreported move, $3bn of his fortune is placed with Lone Star Funds, which was set up in the US 23 years ago.
Since its start-up, Lone Star has established 17 funds with a total capital of more than $70bn.
"We have had solid returns on our investments in Lone Star," said Fredriksen, who is keen to build a diversified portfolio.
Real estate, hedge fund and private equity investments are important elements, in addition to the core activity in shipping and rigs.
Fredriksen is best known for the stock-listed companies in the Fredriksen group, such as Frontline, Golden Ocean, Seadrill, Flex LNG and Ship Finance International. But, today, these companies only represent slightly less than one-third of the assets in the group.
Fredriksen says Kathrine and Cecilie are heavily involved in the financial and real estate side of the business, as well as Marine Harvest.
Debt-free at the top
While the stock-listed companies have debt, the top outfits under his Greenwich Holdings umbrella are debt-free and sit with liquid assets of more than NOK 30bn ($3.7bn).
“It is in that region,” Fredriksen confirmed — the holding companies are private and so results are not reported externally. “I can say that we have an orderly economy in our private companies. We are in an advantageous position. We are lords in our own house. We can quickly turn around if we see possibilities.
“Until recently, we were set for a total profit of some $2bn. But with the strong fall on the stock markets, this figure is sharply reduced. But it is likely also opening new possibilities for us."
This year, Fredriksen has also hired new key employees for his private company, Seatankers Management. In Oslo, former BAHR lawyer Robin Bakken has joined, while private equity and offshore man Joao Silva has been hired by the company among other appointees in London.
We are in an advantageous position. We are lords in our own house. We can quickly turn around if we see possibilities
Even though Fredriksen advocates lean operations, his group has between 60 and 70 employees in Oslo — but this figure also includes his publicly listed companies.
Fredriksen said he is frequently asked if he will consider relocating more business to Oslo and Norway.
“We are finding it increasingly difficult to find qualified personnel here, especially on the chartering and commercial side,” he said, speaking in the Norwegian capital.
But Fredriksen stressed that he still does considerable business with Norwegian shipbrokers. With shipbroker Even Winje, who is now at Galbraith's in Oslo, the group has entered into around 40 newbuilding contracts in China.
“You know John loves your country,” said Mohaghegh, whom Fredriksen met 14 months ago.
