H.M. Pelagic Partners RAIF V.C.I.C PLC announces the launch of its second compartment under the name Pelagic Yield Fund. This comes after the successful launch of its first compartment, Pelagic Fund I, in the third quarter of 2020 with a current fleet of 8 vessels and 4x the initial planned AUM. Pelagic Yield Fund, as the name signifies, is structured in a way that is cash yield friendly, mostly by fixing the vessels on medium to long term charters over the compartment’s 5-year life duration.
The architecture of Pelagic Yield Fund is designed to achieve a profitable yet sustainable balance between vessels on charter contracts and others trading in the spot market. This allows the Fund to ensure a stable stream of cashflows and yield consistent returns per annum, while maintaining sufficient spot exposure to capture potential market upswings. Ultimately, the Fund’s ideology is based on opportunistic entry points – market timing is fundamental at Pelagic Partners.
Pelagic Yield Fund has an expected window of subscription from March 2022 to March 2023 with a target amount of USD 100 million, open for subscriptions to investors who qualify as professional and well-informed. The compartment has a lock-up period of five years to allow the Fund to materialize opportunistic market entries. Pelagic Yield Fund’s investment strategy is to adopt an opportunistic and diversified approach and acquire shipping assets in segments in which the Fund Manager has core expertise. Such shipping assets include, but are not limited to, bulk carriers, tankers, gas carriers, pure car and truck carriers (PCTC), and offshore support vessels.
The Fund Manager aims to structure the compartment with the target of achieving 10 – 12% IRR. With the planned investment and employment strategy of covering up to 50% of the acquired fleet with steady and credible charters, Pelagic Partners aims to produce an annual yield of 5% from its operations. In addition, the Fund Manager periodically evaluates exit opportunities to materialize exceptional appreciations in asset values.
The Fund will be managed in-house by H.M. Pelagic Partners Ltd., a Cyprus-based Alternative Investment Fund Manager. Managing the Fund internally allows Pelagic Partners to fully align its interests with the Fund’s investors by investing at least 10% of the Fund’s investment shares and eliminating market-standard performance fees. Pelagic Partners adopts a family business approach which the Management team want to pass on to the investors and invite them to become partners in the long-lasting journey within the maritime industry.