QInvest and Fortis Bank Nederland to create first Sharia’a Compliant Mezzanine Shipping Fund
The proposed Fund aims to raise USD 200m and will target mezzanine investment opportunities in deep sea vessels. The Fund has an average life of 5 years and seeks to benefit from the down cycle of the shipping industry through an extended investment period of around 18 months. The Fund targets to pay an attractive running cash yield and is structured to benefit from the potential asset appreciation on vessels through an equity kicker.
The new Fund aims to capitalise on the significant dislocation the shipping industry has witnessed over the last 12 months. Furthermore, by focusing on an alternative segment of the capital structure, the mezzanine level, investors are expected to benefit from asset coverage, quarterly cash flows as well as a structure that allows one to benefit from any capital appreciation on the underlying vessels.
The shipping fund is another Sharia’a compliant investment solution which QInvest, Qatar’s leading investment bank, brings to its investor base in the GCC region, and further demonstrates QInvest’s Islamic structuring and product innovation capabilities.
“Shipping asset values have been disproportionately impacted relative to the global economic down-turn. This, combined with tighter credit markets, offers potentially attractive upside as the sector recovers, and we believe the Fund will be well placed to unlock that value for our investors,” commented Shahzad Shahbaz, CEO of QInvest. “Our partnership combines QInvest’s structuring expertise with the specialist industry knowledge and global shipping network that Fortis Bank Nederland holds to provide an innovative investment opportunity for investors looking to diversify their portfolios.”
Fortis Bank Nederland is at the forefront of the ship financing industry and ranks amongst the most reputable in the market with more than USD 7bn of shipping assets under management. Fortis Bank Nederland’s global relationships and technical expertise in the shipping industry will be of major added value to the Fund.
“The establishment of the Fund broadens the product offering for our shipping clients,” commented Gust Biesbroeck, Managing Director Transportation within Energy, Commodities & Transportation. “More importantly, it diversifies and increases sources of debt funding available for the global shipping market in an environment constrained by a general lack of available capital. It reconfirms Fortis Bank Nederland's position at the forefront of developments and innovation in the ship finance market. We are very pleased to cooperate with our partner QInvest to make the Fund a success.”