German shipowning and management group Schulte has set up its own asset management division for third-party investors in shipping.
The new subsidiary, called Hanseatic Capital Management (HCM), will launch and manage investment funds targeting merchant vessels, the group said in a statement on 14 June. The company is led from Cyprus by chief investment officer Kyriacos Charalambides and chief risk officer Stelios Demetriou.
The first fund to be launched, Hanseatic Fund VCIC, aims to initially raise USD120 million with minimum ticket sizes of USD500,000 for acquisitions, mainly Handysize and Supramax bulk carriers and feeder container ships of between 4 and 15 years if age, the Hamburg-based group said. “We are also open to investing in tankers and offshore vessels. We continuously monitor possible opportunities,” Charalambides told Fairplay.
Schulte Group will put up 10% of the capital as anchor investor, with all other aspects, from deal-sourcing via ship management to disposal, to be covered internally, most likely with the assistance of other group companies, such as ship management giant Bernhard Schulte Shipmanagement, which has a managed fleet of 630 vessels. HCM will seek to originate deals primarily in the broader secondhand market, not on tonnage already managed by Bernhard Schulte.
The plan is to rely mainly on equity and to keep debt leverage limited so as to achieve low breakeven points for vessels. The intention is to distribute dividends to investors on a regular basis, which suggests that the focus will not be so much on asset play, buy low sell high. The targeted returns are higher than 10% of the invested capital.
The Hanseatic Fund VCIC is going to be regulated as an ‘alternative investment fund’ (AIF) by the Cyprus Securities and Exchange Commission in line with relevant EU directives, with HCM as authorised AIF manager.
The scheme is likely to raise some eyebrows in the German market where former KG issuing houses such as Ernst Russ, Lloyd Fonds, and Dr Peters also set up AIF management operations over the years as stepping stones to new equity-placing business among retail and instutional investors – so far with limited success.
Investors in the Hanseatic Fund also qualify to apply for the ‘Scheme for naturalisation of Investors in Cyprus by exception’, which allows non-Cypriot investors to apply for Cypriot citizenship, Schulte Group said.