The shipping industry's poor performances have become appealing to investors who want to invest when the price is a bargain, but still a good investment.
Over the last 5 years it has been difficult for some investors to maintain a positive outlook on the international shipping industry. Nevertheless, these poor performances have become very appealing to some members of the investment community, who would like the opportunity to invest when the price is a bargain but still a good investment. As investments continue to support the sector's slow but steady growth over the next year and a half, analysts agree that the industry is set to stabilize. In fact, many expect that the gap between supply and demand will narrow to (no more than) 2 percent in either direction.
In 2013, a series of major deals emerged within the shipping industry that renewed investor confidence and reinforced the advantages of investing in the shipping industry. For example, the American private equity firm Alterna Capital Partners ordered four tankers in June 2013 from South Korea’s Hyundai Mipo Dockyard, at a cost of $130 million. As well, the U.S. investment group York Capital Management has established a joint venture agreement with Greek-owned container ship operator Costamere, that will see the two spend $500 million acquiring shipping vessels. Not to be forgotten, New York-based Oaktree Capital Management partnered with German shipowner Rickmers to order up to 16 container ships. In total, more than $3.5 billion was invested in shipping vessels in 2013, compared with $2.7 billion in 2012 and $4.2 billion in 2011.
Another very important factor in determining why investors are driving more and more capital into this sector is that the investors believe the ships that are being built today are more efficient, thereby making the cost of operating them significantly lower in the future. To further demonstrate the investment community's increasing interest in the worldwide shipping industry, the New York corporate advisory firm Alvarez & Marsal is conducting due diligence on behalf of several private equity funds, who are actively seeking investment opportunities in Asia, particularly the Asian shipping industry; primarily because it is seemingly the most appealing at the moment.