J.P. Morgan Asset Management today announced the closing of its Global Maritime Investment Fund II with $480 million in capital commitments from a broad range of international institutional investors, including pension plans, insurance companies, and endowment and health care entities.
The Fund, which surpassed its $400 million targeted capital raise, is one of the largest dedicated shipping funds. It seeks to invest, through a closed end structure, in modern vessels operating in shipping sub-sectors that are experiencing substantial distress, with values trading near historical lows. The Fund has already invested $312 million or 65% of total capital through the acquisition of 14 assets.
One of J.P. Morgan’s first 14 investments for the Fund.
The firm has already invested 65% of the $480 million raised.
The distressed shipping opportunity is a small part of a broader transportation capital requirement, which has intensified following the departure of traditional funding sources such as banks. “With an estimated $4.5 trillion-plus in capital required to finance global transportation assets over the next 10 years, this is a large-scale and wide-ranging investment opportunity,” said Anton Pil, Managing Partner of J.P. Morgan Global Alternatives, “Institutional investors, seeking uncorrelated and high relative value returns, have discovered this growing, sustainable opportunity to own and lease tangible assets that form the foundation of our interdependent global economy.”
“In the shipping space, investors are capitalizing on an historic opportunity to acquire quality assets at very favorable prices,” continued Andy Dacy, Head of Global Transportation, J.P. Morgan Global Alternatives. “Our established and dedicated transportation investment team with an extensive industry network has been able to acquire vessels at distressed purchase prices, achieving opportunistic-level returns with unlevered cash-on-cash yields averaging 8%, even in what is a historically low charter rate environment.”
With $1.26 billion in institutional client capital dedicated to the transportation industry, J.P. Morgan Asset Management is a leader in this sector globally.
Source: JP Morgan