Upload
others
View
7
Download
0
Embed Size (px)
Citation preview
Investment Funds - An alternative finance vehicle for shipping
Panikos Teklos
Investment Management, Regulatory Risk and Wealth Advisory Leader
Wednesday, 14th February 2018
Risk Advisory
© Deloitte Limited 2018 | Design and implementation of Internal Procedures for Investment Services 2
Page
1. The global economic growth roller coaster 03
2. Bank lending is still tight 07
3. Funds – An alternative shipping financing
vehicle 09
Agenda
© 2018 Deloitte Limited. All rights reserved. 3
1. The global economic growth roller coaster
© 2018 Deloitte Limited. All rights reserved. 4
1. Global economic growth has been rising but volatile…
….. with similar patterns in the US and the EU; China has been gradually slowing down
albeit still at developing at higher rates than the US and the EU
-1,00%
0,00%
1,00%
2,00%
3,00%
4,00%
5,00%
6,00%
World GDP World GDP (Forecast)
-5,00%
0,00%
5,00%
10,00%
15,00%
China China Forecast
United States United States (Forecast)
European Union European Union (Forecast)
Key Economies GDP Growth Global GDP Growth
Source: International Monetary Fund
© 2018 Deloitte Limited. All rights reserved. 5
-5,00%
0,00%
5,00%
10,00%
15,00%
Emerging market and developing economiesEmerging market and developing economies (forecast)Major advanced economies (G7)Major advanced economies (G7) (forecast)
Emerging Economies vs Advanced Economies
… emerging markets outperformed advanced economies…
..but watch out for swings and outflows
© 2018 Deloitte Limited. All rights reserved. 6
The shipping industry recovery has positive signs but is still fragile
Dry Bulk- Signs of recovery
Crude Oil Prices Rising – Suppressing tanker rates?
Baltic Dry Index WTI Crude Oil Price (USD)
0
2000
4000
6000
8000
10000
12000
0
20
40
60
80
100
120
Source: Bloomberg
© 2018 Deloitte Limited. All rights reserved. 7
2. Bank lending is still tight
© 2018 Deloitte Limited. All rights reserved. 8
• The global financial crisis forced banks to
deleverage their balance sheets
• Bank liquidity is deployed very selectively
• Basel III Capital requirements are even more
conservative and punitive asking for
additional capital buffers
• Banks are still tight in lending despite
unprecedented levels of QE and additional
programs such as the TLTROs
• Major shipping finance Banks have
restructured and shrunk their shipping loan
portfolios
Euro area bank loan supply – Bank lending survey
Source: ECB – Statistical Data Warehouse
-10
-5
0
5
10
15
20
25
30
35
40
2. Bank lending is still tight
© 2018 Deloitte Limited. All rights reserved. 9
3. Funds – An alternative shipping financing vehicle
© 2018 Deloitte Limited. All rights reserved. 10
3. Funds – An alternative shipping financing vehicle
Source: European Funds and Asset Managers Association (EFAMA) Annual Report, June 2017
14,3216,94
19,94 19,9722,17
23,79
28,29
36,94
41,3
0
5
10
15
20
25
30
35
40
45
2008 2009 2010 2011 2012 2013 2014 2015 2016
The global market for funds
The global fund industry is expected to grow at 6% CAGR over the course of the
next 5 years!
Latin
America;
1,9; 3%
Asia (ex
Japan &
Australia);
5,2; 7%
Japan and
Austria; 5,2;
8%
Europe;
19,6; 28%
Middle East and Africa; 1,3; 2%
North
America;
36,1; 52%
Worldwide Investment Fund Assets (EUR trillions) Global AUM (69,3 EUR Trillion) - End of 2015
© 2018 Deloitte Limited. All rights reserved. 11
3. Funds – An alternative shipping financing vehicle
The global market for funds
AIFUCITS
Fund Types
Investment strategies:
• Liquid, transferrable securities
• Specific diversification requirements
• Strict borrowing constraints
Investment Strategies:
• Liquid and Illiquid
• Shipping, Private Equity, Real Estate, Fine Spirits,
Diamonds, Financial Assets,
• No major diversification constraints
• No major borrowing constraints
Investors:
• PROFESSIONAL
• Well-Informed
• Institutional
• Retail
Investors:
• RETAIL
• Institutional
• Professional
• HNWI
Legal Forms:
• Investment Company
• Limited Partnership
• Common Fund
Legal Forms:
• Investment Company
• Common Fund
© 2018 Deloitte Limited. All rights reserved. 12
3. Funds – An alternative shipping financing vehicle
An AIF structure managed by an AIFM
AIFM
Registered OR
Regulated entity
Investor AAIF
Can take a number
of forms
• Regulated or Unregulated*
• Flexible structure
• Tax structuring options
• Open-ended or Closed-ended
• Single fund umbrella structure
• Company, Partnership or Common Fund
• Allow for multiple asset classes
• EU marketing and distribution**
• Different share classes for different types of
investors
• Diversification rules as per transposition of EU
directive to national law by each member state
• Possibility for listing on stock exchange
Why are (EU) Funds so popular?
Investor B
Investor C
• Eligible for Citizenship to unitholders subject to
the Republic’s minimum requirements
• Presence of Custodian/Depositary and Fund
Administrator provide additional comfort for
safekeeping of assets and correct calculation of
NAVs as well as reportingCustodian
Fund
Administrator
Auditor
*Subject to certain conditions and eligibility criteria
**Subject to national placement rules
Vessels
Vessel 1
Vessel 2 …
Vessel N
Shipping Loans
Shipping Loan 1
Shipping Loan 2…
Shipping Loan N
© 2018 Deloitte Limited. All rights reserved. 13
3. Funds – An alternative shipping financing vehicle
A typical Private Equity Shipping Fund structure
AIFM
Service Providers
Custodian
Administrator
Auditor
LP 1
Fund vehicle
LP 2 LP N
SPV 1
Vessel 1
SPV 2
Vessel 2
SPV M
Vessel M
General Partner
Investors
Assets
Owns the management
shares of the Fund
Ship Management
Company
© 2018 Deloitte Limited. All rights reserved. 14
© 2016 Deloitte Limited | Presentation for Deloitte Internal Shipping seminar | For internal use only 14
Despite the experienced global
“synchronised growth”……bank lending is still tight
Funds can provide a flexible and
creditble financing alternative
-10
-5
0
5
10
15
20
25
30
35
40
Summary
3. Funds – An alternative shipping financing vehicle
-1,00%
0,00%
1,00%
2,00%
3,00%
4,00%
5,00%
6,00%
World GDP
World GDP (Forecast)
Diversification in financing strategies for shipping owners and managers is key for
the origination of liquidity during economic and shipping cycles
© 2018 Deloitte Limited. All rights reserved. 15
Thank you
© 2018 Deloitte Limited. All rights reserved. 16
?
Important notice
This document has been prepared by Deloitte Limited as defined below for the sole purpose of providing a proposal to the parties to whom it is addressed in order that they may evaluate the capabilities of Deloitte Limited to supply the proposed services.
The information contained in this document has been compiled by Deloitte Limited and includes material which may have been obtained from information provided by various sources and discussions with management but has not been verified or audited. This document
also contains confidential material proprietary to Deloitte Limited. Except in the general context of evaluating our capabilities, no reliance may be placed for any purposes whatsoever on the contents of this document or on its completeness. No representation or warranty,
express or implied, is given and no responsibility or liability is or will be accepted by or on behalf of Deloitte Limited or by any of its partners, members, employees, agents or any other person as to the accuracy, completeness or correctness of the information contained in
this document or any other oral information made available and any such liability is expressly disclaimed.
This document and its contents are confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person in whole or in part without our prior written consent.
This document is an offer and is not intended to be contractually binding. Should this proposal be acceptable to you, and following the conclusion of our internal acceptance procedures, we would be pleased to discuss terms and conditions with you prior to our
appointment.
In this document references to Deloitte are references to Deloitte Limited. Deloitte Limited is the Cyprus member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent
entities. Please see www.deloitte.com/cy/about for a detailed description of the legal structure of DTTL and its member firms.
Deloitte Limited is a private company registered in Cyprus (Reg. No. 162812). Offices: Nicosia, Limassol, Larnaca