Morten Artzen's perspectives on financial investors in shipping

He interspersed his views with gallows humour about PE investors who might not escape the industry - especially in the dry bulk sector. He opined that Apollo Management, the packager of Principal Maritime, “may have recouped their original investment”, however, the result might have been improved if individual ships were sold rather than the en bloc sale of the entire fleet.

Artzen cited two reasons why “long only” funds - notably Fidelity and others such as American Funds - have not piled into the tanker shares. First, uncertainties about China, and secondly, lack of clarity about the impact of low oil prices over a protracted period. He identified Scorpio Tankers and Euronav, which he said “has done everything right” as exceptions where long funds have bought shares.

In discussing the necessity of avoiding the herd behavior that has bedeviled the Private Equity involvement, Arntzen cited Ridgebury Tankers - a second hand tanker buyer backed by Riverstone Investments, under the leadership of shipping veteran Bob Burke - as an entity “that could be the shipping deal of the year.”