The latest Pelagic Partners’ compartment, Pelagic Yield Fund, recently added the first vessels to its portfolio: a duo of product tankers, purchased en-bloc at a price of USD 24.8 million. The two vessels, PELAGIC TAIMEN and PELAGIC TARPON, were both built at STX Shipyard in South Korea in 2006, offering capacities of 50,000 dwt each. They will be managed by Donnelly Tanker Management, an affiliated company of the Fund. One of the vessels will be employed on long-term charter, while the other will trade within the Norient Product Pool.
“The acquisition clearly falls within our target market sector”, says Atef Abou Merhi, Managing Director of Pelagic Partners. “Given the market fundamentals within the Product Tanker space, the company remains quite bullish about the next 2-3 years, planning further acquisitions within this specific segment. As the first transaction within a compartment sets the tone and momentum for future investments, we are satisfied that our analysis and timing proved to be correct to start on a high note with the Pelagic Yield Fund.”
Future outlook
Within just 22 months of operations, Pelagic Partners has reached AUM close to USD 100 million. “This proves the trust we have from our investors, partners, and all stakeholders”, says Atef Abou Merhi. “With the current projects in the pipeline, we are optimistic to keep growing at the same pace for the remainder of the year.”
The Pelagic Yield Fund will continue its equity raising program while investing opportunistically up until Q1 2023. The target is to invest another USD 75-80 million with a primary focus on the Tanker and Offshore segments. Markets where the group companies have a strong presence in will also be monitored. Additionally, there are plans to launch a third compartment under the Pelagic Partners Fund as well as a whole new Fund with different investment strategies during the year.
The Pelagic Yield Fund
Established in March 2022, the Pelagic Yield Fund applies the successful strategy of Pelagic Fund I, the latter currently controlling USD 70 million AUM of 8 diversified vessels.
The new Yield Fund combines the diversification in asset types and employment with relatively low leverage. Its strategy comprises fixing half of the vessels on charter contracts to enhance cashflow visibility and generate annual yield, while leaving sufficient exposure to the spot market and the anticipated upswing. With the kickstart of the Yield Fund and the product tanker acquisitions, the total number of vessels owned by Pelagic Partners increased to 10.
