Between 2000 and 2008 we successfully structured some € 500 million worth of ship investment projects. Over € 200 million of equity was invested in these projects by a wide range of investors.
As of 2008 the maritime industry was severely impacted by the global financial and economic crisis. Subsequently JR Ship Investments acted very cautiously resulting in less project initiatives meeting our quantity standard.
As the charter markets remained low for many years, ship asset values reached low points as well. This offered investments opportunities for those with appetite for depressed assets and relatively high risk profiles.
Spring 2019, we structured a € 100 million investment project for a London based private equity investor. ‘Container Fleet Fund CV’ eventually purchased a fleet of 15 modern container feeder vessels ranging from 750 TEU to 1.400 TEU, which the investor was able to acquire for some € 80 million. Fully paid for with equity. A few months later a € 50 million (50% loan to value) debt financing from a renowned, Hamburg based shipping bank was arranged by us as well, de-risking the equity investment to some € 30 million only. Today the portfolio of vessels has a value of over € 250 million.
We also develop smaller investment projects. One of the examples being one 750 TEU container feeder vessel which we presented to private investors in July 2019. We were able to purchase this vessel for even a lower price level than anticipated and financed it combining 50% debt and 50% equity from retail investors. So far the vessel is operating extremely successful and generating high cash flow returns and is heading for a 30% ROI.
The key success factors of our customized investment projects are:
- Buying well timed and at acceptable price levels
- A ROI/IRR outlook of min. 10%
- A positive ROI/IRR should also be possible in case the market would drop significantly
- If possible; mitigating operational result risks by means of pooling the results of a portfolio of vessels in one – multi vessel – ‘Fleet Fund’ structure
- Conservative budgeting on costs and on future revenue levels
- Conservative approach on residual values
- Excellent commercial and operational ship management
- Professional accounting and reporting to the investors