Shipping investor Premium Maritime Fund has pivoted from container ship sales to tanker sales to reap profits from asset play.
The Ness, Risan & Partners (NRP)-affiliated fund has delivered or agreed on four sales in the product and chemical tankers sectors in just over three months. More sales are in the works, but the fund managers are pleased with the results so far.
“Getting north of $16m for a 2005-built MR tanker — there wouldn’t be anyone unhappy with that,” said Nicolai Heidenreich, co-manager of the Oslo-based fund together with Wilhelm Magelssen.
The transaction Heidenreich was referring to was the sale of the Arne Blystad-controlled 48,700-dwt MR2 tanker Challenge Passage (renamed Beks Bodrum, built 2005), which brokers reported sold for $17.5m.
The Premium Maritime Fund, a merger of three predecessor funds, is structured as an alternative investment fund under Norwegian law. It operates under the aegis of NRP Maritime Asset Management.
It takes minority stakes in vessels, usually of about 25%, alongside other club investors including a disponent owner that operates the ships. Heidenreich and Magelssen also run a credit fund.
The Challenge Passage was among the fund’s earliest tanker investments, in a purchase made in 2015 together with Blystad interests for a reported $19m with a three-year bareboat charter back to seller NYK Line.
The fund is not subject to public reporting requirements, but Heidenreich told TradeWinds its returns on tankers now come to an annual 20% since 2015, or some 135% in total, with $11m invested and $26m paid out. That counts three ships sold last quarter plus one sale to co-owners of a stake in an LR1 tanker at the end of last year.
Brokers have reported that the 19,994-dwt stainless steel chemical carrier Dreggen (renamed Ding Heng 39, built 2008) went for a reported $19.5m, and the 46,646-dwt MR2 Di Matteo (built 2009) for a reported $25.8m,
The Dreggen, which has been enrolled in the Hansa Tankers chemical pool, had been bought in 2018 for a reported $15.8m, and the Stamford Shipping-controlled Di Matteo for $16.4m in 2019.
Premium Maritime Fund held equity shares of 31% or 32% in all three, plus a 25% share in the Salamon-controlled 73,700-dwt LR1 Cape Tampa (built 2009), which fellow shareholders bought out at the end of last year.
The fund now owns minority shares in 17 ships. That is half the number of vessels three years ago, but now with a very different weighting of sectors after selling most of its container ships.
As with the round of profit-taking that straddled the boxship boom, the managers accept that a successful sales campaign will have to capture the peak on the way up as well as on the way down.
“I think we are generally positive towards the product tanker market, and we think the next couple of years could be fantastic, but we don’t know,” Heidenreich said.
“But we invest and divest on the basis that we know we don’t know, and so try to take solid profits off the table when we have the opportunity to do so with our oldest tonnage.
“We have a list of tankers and we have to start somewhere, and we start with the oldest ships because they are the most difficult ships to sell should the market turn.”
The recent sales may have been ahead of the curve in terms of price, but Heidenreich is not much bothered. He compares the fund’s experience in selling boxships.
“We sold our first container ship in April 2020 and felt that the timing was probably a little early. But in the end, we made 75% of our sales at within 25% of the peak value, and to do that you have to start early,” he said.
Recent tanker sales also benefited from long delivery windows of three and four months.
“At historically high rates of around $30,000 per day, that can be worth a couple million,” he said.
Premium Maritime Fund is the result of the merger of three previously separate funds managed through the NRP platform, the oldest dating back to 2015.
Its larger investors include several familiar family names from Norwegian shipping — Wilhelmsen, Odfjell, Klaveness, Steensland and Hoegh. Wilh Wilhelmsen system veteran Christian Due of private Skips AS Tudor is chairman.
