The week’s pace can only be described as frenetic; the investment bank Morgan Stanley held its own conference simultaneously, while Jefferies and Co was also running a series of events.
There were a few noteworthy presentations; Peter Evensen, the ceo of Teekay Corporation, explained how ship finance has evolved since the early 1980’s, when he came onboard as commercial banker. The leading edge cost efficient structures developed among the Teekay companies bear witness to Evensen’s role in driving such changes- culminating in the recent launch of Oslo- listed Tanker Investments Limited.
Euronav’s Paddy Rodgers implored the audience to counteract fragmentation on the shipowning side, through pooling type arrangements, while conference murmurs suggested that Euronav is eyeing a US listing.
Container man Ron Widdows, with a presentation hastily revised to reflect the demise of the P3 alliance, presented a somber view of a business bent on mutually assured destruction of capital as carriers seek cost advantages.
The best one-liner came from Avance Gas’s Christian Andersen, who announced to the standing room only throng that his company would shortly be bidding for Dorian LPG.
The role and impact of Private Equity (PE) continues to dominate the conversations; most of those who commented suggested that PE would be around for some time and that not all “exits” will be IPOs where investors sell out. Teekay’s Evensen showed how specialised shipping expertise can be aligned with PE investors’ objectives- creating structures that will keep financial investors on-board.
Bankers and observers of the German finance scene expressed great concern at the latest round of Asset Quality Reviews, and how many small German companies would be driven out of the market, or be forced to combine. With the conference coming on the heels of the Star Bulk / Oceanbulk deal- where PE investors in a private company were able to monetize their position by taking shares in a listed vehicle, “consolidation” was on the minds of speakers and the audience alike.
While there was much talk about business combinations, many speakers expressed skepticism about the likelihood of meaningful tie-ups in commoditised and fragmented sectors such as tankers and drybulk.
So what of the relationship of shipping and financial markets? The composition of attendees at the 2014 Marine Money event is very telling- reflecting the realisation that the industry has “bottomed” and is now poised to move in a different direction - maybe sideways or possibly upwards. Big data, a new meme, as highlighted in a presentation by Vesselsvalue.com, reveals it all - 500 attendees from last year’s event dealing heavily with company restructurings and the like did not return this year. Instead, the conference drew 800 new delegates- with a large contingent coming from the capital markets, including traders of debt.
Attendees looking for clear insights into precise directions for hires and asset prices were probably the only group that would have been disappointed at the conference- uncertainties still abound. But, for all concerned, the week was both exhausting and exhilarating at the same time. The shipping industry is seeing enormous interest from the capital markets, who may find non-traditional formats and structures for investing. In a nutshell though, all those new faces at the Marine Money event mean that ship finance may have 800 new visages, but is very much alive and well.
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