Downside of private equity in shipping highlighted

[SINGAPORE] The recovery of certain segments of shipping this year has brought with it an infusion of private-equity capital.

Although some of these funds give the much-needed spark to ship-financing in the absence of traditional bank lending, some industry professionals are asking whether the challenges that come with this may be counter-productive.

Among the panellists at the Moore Stephens Singapore Shipping Forum 2014 yesterday was Stavros Tsolakis, a visiting professor of maritime economics and shipping finance at the Singapore Management University and vice-president at the DST Shipping Group, who, referring to these private-equity players' being drawn by strong investment returns, said: "Last year, the prices were really low . . . but the numbers didn't seem to work. This year, especially in dry bulk, the numbers seem to work. So, you see a lot more (private equity) people come in this year."