Pension funds, insurers and other institutional investors have committed $480m (€430m) to a new shipping fund run by JP Morgan Asset Management.
The Global Maritime Investment Fund II has already bought 14 assets, investing $312m or 65% of its total capital, the firm said.
The closed-ended fund aims to invest in modern vessels operating in shipping sub-sectors that are experiencing “substantial distress”, the firm said, with asset values currently trading near historical lows.
Anton Pil, managing partner of JP Morgan Global Alternatives, said: “With an estimated $4.5trn-plus in capital required to finance global transportation assets over the next 10 years, this is a large-scale and wide-ranging investment opportunity.”
He said that, in their search for uncorrelated and high relative value returns, institutional investors had discovered this investment sector, which was a “growing, sustainable opportunity to own and lease tangible assets that form the foundation of our interdependent global economy”.
Andy Dacy, head of global transportation at JP Morgan Global Alternatives, said the company had been able to buy shipping vessels at distressed purchase prices, generating average unleveraged cash-on-cash yields of 8%.
In March, Danish pension funds PensionDanmark and Danica Pension invested in the $300m shipping fund Maritime Investment Fund I, run by Navigare Capital Partners.
Danica Pension cited the attractive prices the fund was getting on new and secondhand vessels as a key benefit of the investment, while PensionDanmark said the investment — which would be heavily correlated with the world trade cycle — would generate a high return over one cycle.
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