Two years after stepping down as chief of Hamburg’s Ernst Russ, Jens Mahnke has set up a company to invest in small and medium-size sustainable shipping projects with a goal of raising €300m ($357m).
Working alongside one of Europe’s leading private equity companies, Euronext Paris-listed Eurazeo, Mahnke’s new firm Elbe Financial Solutions (EFS) has already helped raise €115m.
EFS is acting as shipping and environment, social and governance (ESG) investment advisor to the private equity firm’s asset team on the Eurazeo Sustainable Maritime Infrastructure Fund (ESMI).
Mahnke said ESMI, an asset-based leasing fund, will back financing in euros or dollars via asset leasing to primarily small and medium-size maritime companies mainly in Europe but also worldwide.
It will be dedicated to financing sustainable maritime assets across most sectors of the shipping industry, including oceangoing vessels, wind farm tonnage, inland waterway transport, ferries and port infrastructure.
“The aim is to be able to support the modernisation of the fleet by financing new green tonnage, but also address innovative retrofits,” he said.
Alternatives will include LNG propulsion, batteries or wind assistance plus other alternative fuels and port equipment such as cold ironing and bunkering stations.
“An impressive pipeline has already been built and we are proud to be working on the first transactions for the ESMI fund,” Mahnke added, saying that the fund combines shipping industry experience with financial engineering skills.
Eurazeo has more than €22bn in assets under management.
Bankers warned of a liquidity gap for smaller shipowners to finance the transition to zero-carbon fuels.
Mahnke said the ESMI fund will have high structuring flexibility in terms of loan to value, amortising profile, residual values, terms and bank covenants.
Loan to value ratios will range from 50% to 90% and ticket size from €5m to €35m, he added, with pricing depending on projects’ risk metrics.
Mahnke is chief executive of Hamburg and Luxembourg based EFS with Bernhard Lambilliotte as chairman. Also involved are ESG expert Chris Rowland, and finance and maritime investment professionals Roel Haeseldonckx and Romain Uhl.
Sponsors also include the European Investment Fund (EIF) and other European institutional investors, and the ESMI is closing in on its second fund target of €300m, Mahnke added.
The fund adds lending capacity to EFS’ advisory activity, where it has been supporting debt and equity structuring for European shipowners and energy-related companies, he said.
Mahnke was made chief executive of shipping asset manager Russ in July 2016, following the acquisition of the Konig & Cie Group where he had been a managing partner.
He joined Konig & Cie in 2008 from KG (limited partnership) group Nordcapital, where Mahnke had spent six years. That included a period as managing director of Harper Petersen, a joint brokerage venture with Rickmers Reederei. Russ was acquired by HCI Capital shortly after it bought Konig.
Lambilliotte is chief investment officer at Ecofin, a closed-end investment trust that invests in water, electric power and gas distribution companies across the UK, Europe and the Americas. He has previously worked for Pictet and with Swiss Bank Corp and holds a degree in engineering.
