Could recent investments by high-profile financial gurus such as George Soros and Michael Burry signal a sea change in the way shipping is viewed in the capital markets?
It is certainly a possibility, according to Watson Farley & Williams (WFW) partner Steven Hollander.
TradeWinds revealed last month that Soros’ investment firm Soros Fund Management had spent $39.3m during the first quarter in acquiring Golar LNG’s 2.75% senior unsecured convertible notes, which are due next year. The filings showed he held 40.25m of the notes, accounting for about 10% of the bond issue.
And “Big Short” investor Michael Burry acquired stakes in three listed shipowners in the first three months of the year.
Undercurrents
Hollander, an expert in private equity and capital markets, told TradeWinds that these filings open up the concept that someone like Soros is prepared to invest in shipping.
“There were always the undercurrents of certain people not wanting to invest in shipping,” he said. “You don’t meet an investor at a cocktail party and he says, ‘You know what I want to invest in next? Shipping’.”
The lawyer said the talk is always about technology and real estate and similar “more standard” investments. But as consolidation grips shipping and companies grow in size, “that piques the interest of less shipping-focused investors”.
However, there is nothing to suggest Soros and Burry have been snapping up stakes sold by private equity funds in recent months.
Hollander pointed out that Soros was buying debt, not equity, while Burry’s deals were on the open market.
And tanker companies have yet to see the exits by funds that have arisen through the strength in the boxship and bulker markets.
WFW partner Will Vogel said that even when rates were at record levels last year, Oaktree Capital Management held on to its stake in Torm.
TradeWinds has reported that Burry acquired stakes in Golden Ocean Group, Genco Shipping & Trading and Scorpio Tankers.
