A quiet player in container, crude tanker and dry bulk shipping has shown some of his cards in a recent selldown of Oslo-listed MPC Container Ships (MPCC).
The US, UK and China-educated fund manager Darren Maupin, 45, a former Fidelity Investments investment guru, started his Pilgrim Global and Pelerin Global funds in 2011 and in the past five years has quickly built up holdings across shipping sectors.
The Nevada native and naturalised Swiss citizen is not a man to normally give interviews but agreed to speak to TradeWinds to describe the role he played in putting together MPCC, London and Cardiff-based bulker owner Anglo International Shipping and London-based aframax tanker owner Union Crude Carriers.
Investment banker Joachim Rasmussen of Oslo's Fearnley Securities has worked on most of the deals. Pilgrim Global has often brought along other fund managers as co-investors, notably Tony Mallin of the larger UK-based fund Star Capital Partners.
Rising Star
Mallin, 66, founded Star Capital in 1999. Within shipping, Star Capital was best known for the 2012 acquisition, restructuring and piecemeal sale of German shipbuilder Blohm + Voss.
Maupin said his investment strategy has remained the same as in his earlier career at US investment giant Fidelity.
We try to buy dramatically undervalued assets, and we try to be creative, as we have [been] with MPCC and Anglo International
Darren Maupin
"We try to buy dramatically undervalued assets, and we try to be creative, as we have [been] with MPCC and Anglo International," he said.
Today, many of his undervalued assets have caught fire, and Maupin's fund is facing interesting strategic choices, especially about red-hot MPCC.
Last month, MPCC's acquisition of Arne Blystad's Songa Containers put a spotlight on his interesting position, when Maupin and Mallin cashed in some of their MPCC chips.
In simultaneous sales worth together NOK 550m ($62m), Pilgrim Global and Star Capital took profits on some 25m shares to bring their number three and number one holdings down 4.80% and 18.22%, respectively. To TradeWinds, Maupin described it purely as a portfolio-balancing move.
The timing of that sale at NOK 22 per share benefited from MPCC's just-completed acquisition of Blystad's Songa Containers, but more generally from a booming liner market that had boosted MPCC's share from a 12-month low of NOK 1.9.
What is the next move?
Maupin's position as a board member limits what he can say, but he expressed confidence in MPCC's management and the potential of its shares.
"We believe the minimum fair value of the MPCC share is contracted cash flow plus residual value, and this largely supports the current share price," he told TradeWinds, in a formulation designed not to overstep regulatory restrictions.
Mutual satisfaction
"We're happy with the investment and also with the partnership," he said, referring especially to his fellow director Dr Axel Schroeder, the managing partner of MPCC affiliate Munchmeyer Petersen Capital, who represents the second-largest shareholding on the board.
"We are aligned completely with the Schroeder family," he said. "It's an incredible platform that we have been able to put together with Schroeder. And I wouldn't put us ahead of the Schroeder family in any narrative of the genesis of MPCC."
But Maupin has no sentimental ties to shipping, and the question for an investor in his position seems less whether to take profits off the table, but when and how much at a time.
The original play in 2017 was to devise a financial vehicle that could acquire undervalued tonnage and supply it to end users while waiting for an inevitable appreciation.
"Pilgrim Global identified feeder containerships as dramatically undervalued," he said. "Fearnley Securities acted as a matchmaker and introduced us to the Schroeder family, who had a similar view. We then introduced the opportunity to Star Capital and Fidelity to add capital and scale it. After that, things happened fairly quickly."
He is happy with the result.
"In scale and in its commercial and technical capability, MPC Container has evolved to become one of the few companies able to serve as strategic counterparty to the liner companies," he said.
But now Maupin is looking at MPCC with a seller's as well as an owner's eyes.
"We're sprinting, we're not walking in terms of building and maximising this platform as rapidly and rationally as possible. And yet we are mindful of the financial windfall the market is experiencing right now," Maupin told TradeWinds.
"These are good times. We know they're not going to last forever."
