New York has traditionally played an important role, but cannot claim outright market dominance as other clusters have surged ahead. In an effort to understand the Big Apple’s place in the shipping firmament, New York Maritime (NYMAR), an organization drawing heavily from the local finance and legal communities (plus a smattering of other service providers), began its 2013 seminar schedule with a strategic review. Indeed, the breakfast topic was billed as a SWOT analysis (strengths, weaknesses, opportunities, threats) of the New York sector.
Hosted at the offices of LISCR- the manager of the Liberian registry, located very near Connecticut-facing Grand Central Station, the session was moderated by the finance lawyer Greg Chase. The three presenters, Scott Bergeron, of LISCR- an open registry manager, Kevin O’Hara, from AMA Capital Partners, a boutique shipping merchant bank, and Hugh Baker, from Scorpio Tankers- a growing force in the product tanker sector, each offered their unique take on New York as a maritime center. After the prepared presentations, the audience came to life, in a lively round-table conversation moderated by Chase.
So what, exactly, is good and bad about New York? Not surprisingly, the S (strengths) and O (opportunities) fueled much of the conversations. Though the meeting had been arranged well in advance, its timing was perfect for driving home Hugh Baker’s point that “New York is by far the most liquid and supportive location to raise capital.” Scorpio, set to continue its fleet expansion, had raised $250 million of follow-on equity on the previous day. A week after the breakfast, Scorpio had placed orders for eight more newbuilds, with options. The other speakers offered variations on Baker’s theme. Kevin O’Hara, who is closely in touch with the banking sector, touched on a strength yet to be completely revealed. As shipping plods through its cycles, a whole new group of companies will evolve. Distress begets private equity and debt restructurings- which will then spawn exits and re-packagings few years out. Mr. Bergeron noted the abundance of “recognized and tested legal and enforcement instruments” in New York, to support all manner of shipping deals.
The W (weaknesses) and T (threats) were noted in the prepared speeches and the round-table chatter. New York’s relative paucity of technical and operational experts, compared to other shipping centers was pointed out multiple times. Geography matters- in an industry that’s clearly been pulled eastwards to Asia, Mr. O’Hara recounted numerous instances of all-nighters, as AMA’s deal-makers were negotiating in real time with Europe and Asia.
New York, proxied by NYMAR, is vibrant; perhaps Scott Bergeron offered the most useful path for the local cluster, citing opportunities arising from “new entrants to the market” and “better products and better solutions”, as the shipping cycle zigs, instead of zagging.