Norwegian shipping bond investor Holberg plans a new high-yield credit fund.
The Bergen-based asset management company, which manages over NOK 30bn ($2.9bn), will start the new fund, Holberg Kreditt Fokus, at the end of February.
The launch comes after the firm soft closed its fund Holberg Kreditt last week. Investors must now pay a fee if they want to buy into it.
The NOK 7bn fund, which invests in Nordic shipping credit and other high-yield bonds, had reached its maximum capacity, the asset manager said in a statement.
The new fund will be an alternative investment fund (AIF) with a maximum capacity of NOK 3bn, given current market conditions. It will have the same investment management team as Holberg Kreditt, consisting of chief investment officer Tormod Vagenes and portfolio managers Andrea Moen Mjatveit and Ole-Andreas Grendstadbakk.
Holberg Kreditt will also have the same strategy and investment universe as the older fund, buying bonds with at least a rating of B-. But as an AIF it will not have the same restrictions on the size of the holdings and liquidity, which gives the fund managers more freedom to select investments actively.
“We want to have a concentrated portfolio with not too many issuers,” Moen Mjatveit told TradeWinds.
Holberg Kreditt has historically invested a lot in shipping bonds. But in the past years, the segment’s share of the portfolio has fallen to 13% from 20%-25% earlier.
The outstanding volume of Nordic bonds from shipping companies fell in 2023, according to DNB.
“When they have had good earnings and profitability, they haven’t had the same need for refinancing. They haven’t raised so much of what has matured. There’s less outstanding so it’s unfortunately a smaller part of our portfolio,” Moen Mjatveit said.
Danish product tanker owner Torm earlier in January raised $200m by issuing five-year unsecured bonds with a fixed coupon of 8.25%.
“We weren’t willing to go to that low rates. It says something about the wish from the investor community in this market about having shipping companies in the portfolio,” Moen Mjatveit said.
Holberg Kreditt, which returned 13% in 2023, holds bonds issued by Altera Shuttle Tankers, BW Offshore, Color Group, Golar LNG, Hoegh LNG, Ocean Yield, Odfjell Drilling, PGS, Seapeak and SFL Corporation.
“We’ve liked that industry. Especially the issuers who have had long contracts, giving increased visibility of future cash flow. We have some stayers in our portfolio, such as SFL and Ocean Yield. Those are credits that we’ve found attractive. They have a diversification internally because they are active in several shipping segments,” she said.
Moen Mjatveit would like to see higher bond issuance in the shipping sector in 2024.
“I’m very curious about how much volume will be issued. Whether there will be anyone raising money. If they do that, the demand for that segment is so high at the moment so they can probably raise capital at very attractive levels,” she said.
