Shipping Investment Funds

The last year has been a challenging one for the world's shipping industry. The global financial crisis, the sudden change in attitude of lenders and the fall in shipping freight rates (and corresponding decline in ship values) has made it more difficult for participants in the shipping markets to obtain the finance and capital needed to operate their business. As the availability of traditional sources of finance has dried up, attention has started to shift again towards investment funds, private equity and alternative sources of funding to help fill the gaps.

The story of the shipping markets over the last five years has been a remarkable one. The prolonged period of boom, combined with readily available debt finance at relatively low cost, attracted investors new to the industry with limited experience of its cyclical nature. The buoyant credit markets supported the idea that owning a ship with a long term charter was, to an extent, a means of replicating a fixed income investment with a...