Easterly Asset Management announced the formation of Maritime Logistics Equity Partners (MLEP), a new company formed to take advantage of the enormous opportunities in international shipping markets, including the chemical tanker shipping sector that is projected to be a $9.5 billion market by 2026.
“There is a compelling opportunity to invest in pre-owned chemical tankers, given the limited supply and growing demand for the vessels, a low future orderbook for shipping construction and the expansion of chemical trade lanes,” said Darrell Crate, Managing Principal of Easterly Asset Management and MLEP’s Chief Executive Officer. “Like the oceans themselves, the opportunities are vast.”
In its first transaction, MLEP acquired two stainless steel chemical tankers, the Easterly Beech Galaxy and the Easterly Lime Galaxy, from CIDO Shipping.
“MLEP has recently acquired two additional vessels and is actively looking to acquire more stainless-steel tonnage of all sizes aged 10-15 years,” said Crate. MLEP intends to acquire more stainless steel vessels by the end of 2021. By acquiring previously owned tankers to meet increased demand, MLEP can provide investors with an attractive level of regular, growing income as well as capital returns. “Chemical tankers may not be glamorous, but they keep the global economy humming and investors happy with a steady stream of income,” added Crate.
“We are actively looking to acquire more stainless-steel tonnage of all sizes aged 10-15 years,” said Darrell Crate, Maritime Logistics Equity Partners’ CEO.
MLEP is responding to industry trends, including a decline in the building of chemical tankers intended for the transport of bulk liquids such as palm oil, feedstock and other commodities. Following a construction boom that peaked in 2008, shipbuilders are now focused on building other tanker types and sizes. With increasing chemical production, tight ship supply and a lack of liquidity in the capital markets for new tankers, there is growing demand for such vessels. MLEP is acquiring tankers built during the boom but with years of productive life remaining and putting them out for hire through WOMAR. “A tight shipping supply, combined with increased global chemical production, is a powerful tailwind for existing vessels,” added Crate.
MLEP will place all of its acquired vessel into WOMAR’s Tanker Pools. WOMAR Chief Executive Officer Hans Van der Zijde said, “We welcome the opportunity to work with MLEP and to build a long-lasting commercial asset management relationship. Since September 2019, we have been working closely with US private equity investors and feel WOMAR has a unique product offering for institutional investors becoming ship owners.”