Shipping & Offshore
Fearnley Project Finance has concentrated on projects of two main categories of shipping with different risk / return profiles;
- Financial projects where the focus is basic long term charter parties to renowned charterers, hence reduced market exposure
- Asset play and joint venture projects where the timing in relation to the market, shipping values and rates are the deciding factors.
Fearnley Project Finance Shipping & Offshore have syndicated close to 100 vessels of a total value of USD 1.5 billion since 2000. The current portfolio of projects is well diversified and covers traditional-, as well as industrial shipping & offshore segments.
Fearnley Project Finance has since 1982 focused on projects with long term bareboat charter parties to renowned charterers. Our projects operate with an annual budgeted return on equity between 10% and 25% p.a. The market and operating exposure is reduced, because the exposure is on the charterer, not the owners.
An asset play/joint venture investment has greater risk than financial investments because the exposure towards the market and operations are greater. Historically, the shipping markets have been volatile which has in periods resulted in high returns to the investors. Risk towards the technical operations, rates and the vessels’ value growth is however substantial. Fearnley Finans will consider asset play projects when the timing is appropriate.
Direct investments in shipping are considered good alternatives to stock investments. The return on fixed income projects (bareboat) is also generally higher than in the bond market.
Investments in shipping may also provide tax benefits because the level of depreciation on vessels is high.