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The right TIME to invest in bulkers?

The right TIME to invest in bulkers?
As the dry bulk shipping markets scrapes along the bottom a new UK retail investment fund says its time by dry bulk ships targeting a 27% return.

TIME Investments is a new Enterprise Investment Scheme (EIS) plans to invest GBP20m in dry bulk shipping citing the difficulties the sector is facing as an investment opportunity that is also asset backed with a resale or scrap value for the vessel.

The fund is flagging up some well known names in UK shipping with an advisory committee comprising Braemar founder Alan Marsh, UK Chamber of Shipping chief executive Guy Platten, and Jim Eversen former md and head of Shipping at ED&F Man Shipping.

TIME Investments flags up the current all time low rates and bankruptcies such as Daichii Chou as making it the time to buy at the bottom of the cycle. It said its base case return target is for GBP1.27 for GBP1.00 invested, with and initial income tax relief of 30 pence under its EIS status.

“Secondhand dry bulk vessel values are trading at close to historical lows. A tax efficient investment that gives investors a GBP1 investment for 70 pence without having to use bank debt at this point in the cycle is compelling,” argued Marsh.

The fund will split the GBP20m investment over four tranches with each company buying a secondhand dry bulk vessel. It said it would not use debt to acquire the ships.

The minimum investment in the fund will be GBP10,000 that must be made by an authorized intermediary.

“With global seatrade expected to double by 2030, there are significant investment opportunities in the global shipping industry.  The UK Chamber of Shipping is therefore delighted to offer its regulatory expertise to Time Investments, whose EIS scheme represents a gamechanger in ship financing,” Platten commented.