The Fund, Girder Variable Capital Investment Company Ltd (Girder Capital), is incorporated in Cyprus as a variable capital investment company, and is authorised and regulated by the Cyprus Securities and Exchange Commission (CySEC) as an Alternative Investment Fund under License No: AIF03/2014 with the scope to invest in shipping.

A carefully planned and correctly implemented maritime investment strategy may reward investors with higher yields than other asset classes. “Maritime Investments offer inflation protection not available in conventional fixed income investments, and low correlations insulate maritime when contrasted with other income-generating strategies” (Source: Maritime Investing: An Income Opportunity, J.P. Morgan Asset Management). Investing in the right types of ships, taking advantage of the attractive entry point offered by historically low asset values, and applying a well-structured employment strategy including time and voyage charters has the potential for long term solid returns.

Shipping may be considered as a cyclical industry characterized by trough, recovery, peak, and slump periods. “It is the maritime’s volatility that often creates opportunity for investors” (Source: Maritime Investing: An Income Opportunity, J.P. Morgan Asset Management).

The Fund Manager believes that this is the right time to invest in Shipping. The Shipping Market is currently in its 8th year of recession, which was a result of the global financial crisis triggered by the credit-crunch in 2008, combined with the shipping market’s natural downturn and oversupply of newbuilding ships entering the market after 2008. A market which has not been in equilibrium these past few years with the vessel prices being kept very high compared to the prevailing freight rates, since the majority of this very large number of shipowners who purchased their vessels at high prices refused to realize their losses and insisted on operating these vessels with negative cash flow. Only the last few months has the market begun the correction, with the prices of ships falling considerably below the historical average values and at the same time the rate of influx of ships into the market has decreased substantially, which in combination with the increased scrapping activity, is a solid indication toward the resurgence of the Shipping Market.

Moreover, historically the shipping industry has offered some of the best investment opportunities at times of economic uncertainty, and this is definitely a time of economic uncertainty. With the turbulent recent behaviour of the stock markets and other asset classes, and with interest rates at all-time lows, shipping may offer an alternative investment solution in an industry that has finally begun its market correction and appears to be close to the upturn in its cyclical trajectory.

The purpose of an Alternative Investment Fund (AIF) is the raising of capital from a number of investors and the collective investment of funds, within a defined investment strategy. The regulated structure of AIFs ensures a coherent framework and implementation of appropriate investor protection mechanisms.

Such vehicles provide an arrangement that enables a group of investors to add collectively their assets, have these professionally managed and invested by independent managers/entities and, extract earnings in a tax efficient manner.

Furthermore, the availability of flexible structuring options and ring-fencing tools, caters for multiple investment compartments; therefore allowing the parallel management of different pools of assets with distinct investment policies.

The contemporary restraint of conventional asset (ships) acquisition methods and decline of investments through shipping listed companies, has created an innovative environment for private equity investments.

 

AIF arrangements are exquisitely suited to the shipping industry – as they provide a mechanism for sharing risk, by operating contributed assets as a cohesive fleet and collecting and distributing returns under a weighting system of subscribed units.