Pelagic Partners are anchor investors and founders with an intimate knowledge of the shipping industry that has been acquired and developed over the course of 30 years. The company’s control over the entire value chain uniquely places it to close market-level acquisitions. This article will look at Pelagic Partners’ investment in Hunter Group and the significant scope for growth posed in the global tanker industry in coming years.

Pelagic Partners, a leading Cypriot shipowner, recently increased its shareholding in the Norway-based Hunter Group. Pelagic Investment Fund RAIF purchased a further 409,695 shares in Hunter Group as part of its Pelagic Yield Fund investment portfolio in February 2024. Following the recent acquisition, the Pelagic Yield Fund now holds a total of 5.7 million shares in Hunger Group. The acquisition represented 0.004% of Hunter Group’s share capital, pushing the Pelagic Yield Fund over the 5% threshold for disclosure of large shareholdings, with its stake in the company now representing circa 5.027% of Hunter Group’s total share capital. Hunger Group’s market capitalization is estimated at around $24 million.

Pelagic Partners is also the second-largest shareholder in the platform supply vessel specialist Golden Energy Offshore Services (GEOS) of Norway. In December 2023, Pelagic Partners purchase 6.12 million more shares in GEOS for circa $770,000, bring Pelagic Partners’ total holding in GEOS to 118.5 million shares, representing a 23.63% stake in the company. Pelagic Investment Fund RAIF co-founder Atef Abou Merhi had sat on the GEOS board since his company purchased 95 million shares in GEOS in October 2023, acquiring a 20% holding. The deal was part of a private placement led by GEOS’s largest shareholder, Oaktree Capital Management. Today, Pelagic Partners is the Oslo-listed carrier’s second-largest shareholder.

Hunter Group recently raised funding to finance two very large crude carrier (VLCC) charters. The move came in the wake of a recent announcement by the company suggesting that a significant imbalance between demand and supply of crude tankers was becoming increasingly likely. In the announcement, Hunter Group expressed the opinion that it would only be a matter of time before VLCC rates advanced too, initiating what it suggested would be a multi-year bull cycle. The company reflected that the VLCC orderbook was at its lowest level since the 1980s, pointing out that the segment relies on an aging fleet. Against this backdrop, Hunter Group suggested that demand for VLCCs was likely to grow as global oil demand increases, adding that the problem would be further magnified by geographical distances between oil production and consumption growth.

In early 2018, Hunter Group invested circa $700 million in the construction of eight eco scrubber-fitted VLCCs in South Korea. The company subsequently supervised construction of a further four VLCCs at the same yard, bringing the total number of VLCCs built during the period to a fleet of 12. Delivered between August 2019 and July 2020, the ships were successfully operated by Hunter Group then gradually divested, with the final vessel sold in 2022. Throughout the investment period, Hunter Group distributed over $300 million in dividends to shareholders.

Pelagic Partners is led by an experienced team with decades of maritime industry expertise. Its founders, who are also anchor investors in the fund, are shipowners with access to and intimate knowledge of the global shipping markets.

Pelagic Investment Fund RAIF investments are primarily driven by the founders’ experience, outreach and network, which have been developed over three decades. The fund’s investment strategy is based on three pillars:

  1. Market sentiment
  2. Vessel values and respective downside risk
  3. Cashflow generation and operational flexibility within the group

Pelagic Partners invests in a diversified selection of maritime assets. Recognizing the cyclical nature of shipping markets, the company continually monitors its portfolio and strategies to ensure a steady dividend distribution stream for all its investors.