Norway’s Gersemi Asset Management has reduced its investments in tankers and bulkers after share price rises.
The Joakim Hannisdahl-led company’s shipping fund enjoyed “another month of positive returns”, it said.
The value increased 2% in March to reach an all-time high, with the compound annual growth rate at 40%.
“The fund has continued to rise during the first days of April and is currently +8.2% year to date,” Hannisdahl said.
The investor explained the fund has used the high equity pricing in dry bulk and tankers to reduce its long allocations.
“Both segments have seen asset prices rise significantly above our fair-value models and are priced relatively high on net asset value and earnings multiples after recent strong share price development,” Hannisdahl said.
The fund has 67% invested in cash, with tankers on 25% and dry bulk 8%.
“While we see deteriorating risk/reward in dry bulk in the coming months amid recent weak leading data points and coming from unseasonably strong export volumes, we do see better support in oil tankers from continued trade disruptions amid limited fleet growth,” Hannisdahl said.
Gersemi shorted Belgian tanker owner Euronav’s stock ahead of the expiry date of the Saverys family company CMB’s mandatory bid for its shares in March.
“The share has [only] fallen 6% since the bid expired, being supported by continued share purchases by the Saverys family,” the investor added.
VLGC companies provided gains
“We also locked in some intra-month trading gains in VLGCs amid spot rate volatility,” Hannisdahl said.
The fund has “plenty” of available cash to take advantage of expected and unexpected opportunities that may arise, he added.
In February, Gersemi took advantage of rising bulker company stock prices.
The fund had begun the month mainly positioned long on tankers, but with a minor long position in containers, while being similarly short in dry bulk.
Gersemi’s allocation then peaked at 33% towards bulkers in late February and was then cut to 27%.
