YANGZIJIANG Financial Holding : YF8 0%’s maritime private equity fund has invested in two chemical and product tanker projects for US$32.1 million.

The fund – Yangzijiang Maritime Private Equity Fund #2 – has also entered into an agreement to co-charter for eight eco-medium-range chemical and product tankers for a period of less than a year for each vessel, the investment manager said in a bourse filing on Thursday (Jul 20).

The two tankers the fund has invested in are RT Star, for a subscribed investment amount of US$19.5 million, and OM Shanghai, for US$12.6 million.

RT Star is a 26,199 deadweight tonnage (DWT) stainless steel chemical and product tanker that transports International Maritime Organization (IMO) 2 cargoes. The fund co-owns the vessel with a Shanghai-based tanker specialist owner or operator.

Meanwhile, OM Shanghai is a 19,999 DWT stainless steel chemical and product tanker that also carries IMO 2 cargoes. The maritime fund co-owns the vessel with a Singapore-based owner or operator.

Providing details on the co-chartering agreement, Yangzijiang Financial said the fund, along with the charterer, plans to secure time charters for the first time charter trip of the charter period, and hedge against weak summer months by entering into forward freight agreements.

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“This will aid in protecting the fund’s earnings and ensure that it benefits from the expected improvements in medium-range tanker charter rates,” said the company.

Demand for crude oil tankers is expected to rise by 6.5 per cent in 2023, while demand for product tankers is expected to grow by 9.1 per cent, noted Yangzijiang Financial in its statement.

The overall demand outlook for 2024 and 2025 is also positive, with total tanker DWT demand projected to go up by 4.9 per cent.

“The combination of strong demand and tight supply is likely to support tanker charter rates in the coming years,” said the company. “Tanker owners are likely to benefit from this positive market outlook, as they will be able to command higher charter rates for their vessels.”

Yangzijiang Financial added that the tanker project investments and co-chartering agreements are “in keeping with the core strategies of the fund”, which has closed a total of 12 deals as of Thursday.

To date, the maritime fund has committed US$178.8 million in funding and has invested a sum of US$82.8 million.

“The fund aims to achieve capital appreciation, as well as generate steady income and returns through investments in a variety of maritime assets that include both debt and equity projects,” said chief executive Vincent Toe, adding that it also hopes to develop as an “alternative and stable source of capital for the shipping industry”.

“With capital commitments of US$500 million, we are well on our way to achieving our goal of transitioning Yangzijiang Financial into a full-fledged asset manager,” said Toe.

Shares of Yangzijiang Financial closed flat at S$0.335 on Thursday, before the announcement.