Direct Asset Investment
At a time when market participants were highly focused on premium-priced “eco” tonnage and many believed “non-eco” ships to be obsolete, we focused on lower capital cost assets, subsequently investing in advanced coatings, equipment retrofits, and real-time performance optimization to deliver higher returns on invested capital. The vessels were sold in the strong 2022/2023 market, generating an attractive return over the ten-year investment period.
Ridgebury Crude Tankers
Launching during a trough market in the summer of 2013, when many believed the emerging US shale story meant the end of the Suezmax trade, we began by purchasing a Suezmax newbuild resale from a Korean shipyard at the lowest price paid by any owner from 2005 to 2022. Over the ensuing nine months we assembled a fleet of Suezmax tankers during a recovering market, using a mix of equity, bank debt and public bonds. We continued to actively manage this portfolio through different market cycles. We installed scrubbers on most of the vessels prior to 2020, then repaid all debt in the strong 2020 market, allowing us to expand the fleet in 2021 at trough values. We began harvesting the portfolio through careful sales in 2022 at historically high values. The final sale was completed in August 2023, ultimately delivering an attractive return over the ten-year investment period.
Ridgebury V4 Investments
We structured the purchase of four VLCCs that were owned by distressed debt investors through a bankruptcy process. Acquired during a very strong earnings market, we placed two on attractive charters, maintaining spot exposure on the other two, and writing the investment down to nearly scrap value in the initial 15 months. One vessel was sold for demolition in 2018, with the other three sold during the market spike of early 2020. Despite a very difficult tanker sector period for the for much of the investment horizon, Ridgebury V4 generated positive returns to investors.
Ridgebury VL II
We purchased four 15 – 16-year-old VLCCs from two different publicly-traded sellers in a down market at a small premium to scrap values. With moderate leverage and low breakeven economics, the investment survived through a difficult 2018 for tankers (a period that saw publicly-traded tanker stocks decline substantially). We reduced risk by selling one vessel to an FSO buyer at a premium to market pricing in early 2019. A short but significant spike in late 2019 driven primarily by COSCO sanctions opened a window to sell the other three vessels at strong prices. Investors received a positive equity return.
We purchased three sister Handysize product carriers; two were placed on long-term fixed rate charters and one on a spot-linked charter, to provide a stable yield to investors with downside protection and some upside economics.
Although the vehicle was intended to run for several years, a strong market allowed for an early sale, delivering a positive equity return to investors.
Ridgebury Suez 2020
We negotiated the purchase of two “firm” Suezmax tankers and secured an option from the sellers to purchase two additional sister vessels. To reduce risk, one of the firm ships was off-loaded to a third party, and the two below-market options were contributed as initial capital to a joint venture with a major publicly traded shipowner. The initial vessel was sold after a year, and the joint venture ships were sold over the ensuing eighteen months. Investors received a positive equity return.
Ridgebury VL III
We purchased four vessel-owning companies that held remaining above-market charter exposure. This provided significant cash flow during the difficult market of 2021, writing down our exposure meaningfully. Upon completion of the fixed-rate charters, and the VLCC market remaining firmly in the doldrums, we sold two of the four ships to reduce exposure. When the market for older non-eco VLCCs continued to be very challenged in the first half of 2022, we sold the remaining two vessels. Despite a market that was materially worse than our underwriting case, through careful structuring and investment discipline we generated a positive equity return to investors.
Ridgebury MR III
We purchased two sister MRs with favorable dry dock positions from a financial seller, in a seamless transaction where we maintained existing commercial and technical employment. This profile has allowed the vessels to participate fully in the strengthening product tanker market of 2022. The vessels were sold in the strong 2022 market, generating positive equity returns well higher than the underwriting case
Ridgebury MR 2021
We purchased a fleet of six MR tankers in August 2021 at prices reflecting the difficult market at the time. With conservative leverage and a 100% spot market orientation, the investment has enjoyed high cash-on-cash returns during 2022, while third-party valuations have increased significantly. The vessels were sold in the strong 2022/2023 market, generating positive equity returns well higher than the underwriting case.
Third-Party Asset Management
New Agathonissos Finance (Eletson)
We managed a complicated and contentious situation for bondholders, taking control of bank accounts, monitoring and approving all inflows and outflows, auditing voyages to stabilize cash flow and prevent leakage. We managed a complex sales process, selling thirteen older vessels to multiple buyers to maximize bondholder recovery.
We advised bondholders who had recently become asset owners through a Chapter 11 bankruptcy reorganization, replacing related-party management with third-party commercial and technical management on arms-length terms. We managed challenging dry docks, significantly improving vessel performance then sourced and organized a successful structured exit for bondholders.