Danish shipping executive Carsten Mortensen has launched his own private equity shipowning venture, which is set to close its first move in the product tanker market.
Mortensen is working with fellow deal-maker Freddie Lee on Dee4 Capital Partners, which has raised cash for a first KS (limited partnership) project and is eyeing further transactions.
Former Norden boss Mortensen has inaugurated the new investment firm nine months after he resigned as CEO of BW Group.
Dee4 Capital has wrapped up $41m for its first KS fund and expects to have generated capital of $100m by the close of 2019.
The purchase of three secondhand product tankers is expected to close next month with debt financing in place from a Scandinavian bank.
Mortensen said 18 shipping investors are backing the fund, including family offices, foundations and maritime professionals.
“I’m totally excited about this new venture,” he told TradeWinds today. “I think it’s a phenomenal chance to unite the best of two worlds, shipping and private equity.”
Private equity is not always a popular concept in shipping today, but Mortensen said Dee4 Capital is different to most as it is led by a shipping man.
“It is private equity as we have gathered equity from some investors, but the whole foundation of it is a deep, intimate knowledge of the industry,” he said.
Mortensen said the investors, including himself and Lee, are mostly from Denmark and Dee4 Capital would look to build on the strength of the nation’s maritime cluster.
“This will be a nimble organisation with five to 10 people,” he said.
“This is not going to be a big organisation. It will be smart people who I can laugh with and do good investments.
"This is the objective after stepping out of the corporate CEO life and investing my own money with like-minded people.”
Shipping players in Copenhagen and globally have been eagerly awaiting Mortensen’s next move after his surprise resignation from BW last September.
His decision to first target the product tanker market is no surprise given Norden and BW were active in the sector and he and Lee were both involved in the $2.3bn merger of Hafnia Tankers and BW Tankers.
That swoop was Mortensen’s last major transaction at the helm of BW, which has blazed a trail of mergers and acquisitions during the past three years.
His tenure at BW included the combination of the group’s VLCCs into DHT Holdings, in a transaction which made it the largest investor in the New York-listed company, and BW LPG’s purchase of Norwegian rival Aurora LPG.
Dee4 Capital is, however, not confined to the product segment and is open to investments in other areas of shipping.
Mortensen told TradeWinds: “I am completely agnostic which commoditised shipping segment we are investing in.
"The whole thought is we are looking for short-term dislocation for long-term benefit."
At Norden Mortensen was head of the company’s dry cargo division before becoming chief executive, while BW is one of the largest shipowning groups in the world, with interests spanning dry cargo, crude and product tankers, LNG, LPG and offshore.
Oxford graduate Lee has a catalogue of deals on his own CV, including the takeover of UK supermarket Somerfield by the Co-operative Group in 2009.
Before moving to Standen Investments in 2016, he was key player at Barclays Natural Resource Investments, heading private equity investments across offshore, energy, power and renewables.
Mortensen, who has made private shipowning investments previously, says the formation of the new venture was not on the cards when he left BW, with the Dee4 Capital project only starting to develop this year.
“I left because of the travelling commitments and because I wanted to prioritise differently,” he explained.
“Now there is a chance to be active in what I have done for my entire life [shipping] in a strong maritime cluster in Denmark, where my family lives. That is why I have gone this way.”
