Star Capital Partnership has taken over the world’s largest third-party ship manager, V.Group, at a time it expects shipowners have an increased appetite to outsource.
Star Capital teamed up with diversified Antwerp-based investor Ackermans & van Haaren and others to buy V.Group from Advent International, the parties announced on Monday.
Sources close to Star Capital told TradeWinds the takeover would allow the operation to accelerate a strategic journey the London-based private equity fund has been on for the past three years.
They pointed to the strong capital structure and very modest debt post-deal as supportive of allowing most of the operating cash flow to be reinvested in improving and growing the business.
V.Group is viewed as a good fit with Star’s investment focus and the compliance-driven nature of its services.
“Although outsourcing is well established in the industry, there are strong tailwinds from increasing compliance regulations which are making many shipowners outsource these services for the first time to a strong partner like V.Group,” sources close to Star Capital said.
V.Group chief executive Rene Kofod-Olsen told TradeWinds on Monday he aims to capitalise on the need for smaller shipowners to farm out many aspects of their operations to third parties.
Star Capital has been out of shipping since selling its last shares in MPC Container Ships in October 2022.
The fund bought into the Oslo-listed feeder vessel specialist in 2017, when it was starting out on what was then Oslo’s Merkur Market board.
Tailwinds from regulations
V.Group’s total borrowings at the end of 2022 stood at $610m.
Star will be reducing the amount of debt on V.Group’s balance sheet “very significantly” in line with its investment approach, the sources added.
This will free most of the cash from its operations for making investments to “future-proof and grow the company”.
Many funds have a specific period in mind for a return on their investment and an eventual exit by selling out.
The sources told TradeWinds that Star Capital has a long-term approach and does not have premeditated timelines for investments.
“Star has a very successful track record investing in the shipping sector through previous fully realised investments in Blohm+Voss and MPC Container Ships,” one source said.
The fund describes itself as focused on developing strategic asset-based businesses in Western Europe.
Star is led by managing partner Paul Gough and executive chairman and managing partner Tony Mallin, who is a director and co-founder of UK bulker owner Anglo International.
It was set up in 1999 and looks to invest in operations with an enterprise value of between €50m ($53.6m) and €1bn.
“Our strategy is focused on businesses characterised by strategic qualities that provide strong downside protection,” the firm says on its website.
“Using our capital, financing expertise and sector knowledge, we work in partnership with management to increase shareholder value by highlighting the long-term stable cash flow characteristics of these businesses.”
