Easterly Asset Management’s Maritime Logistics Equity Partners (MLEP), formed last year to invest in critical maritime shipping assets, announced today that it has acquired three additional vessels through MLEP I, its first chemical tanker investment tranche. The newly purchased vessels are all 24,000 dwt coated chemical tankers, larger than the four J19 stainless steel chemical tankers previously acquired by MLEP I.
“The new acquisitions through MLEP I show the appeal of our focus on benefitting from the substantial dislocations and opportunities in international shipping markets by acquiring and making available for hire pre-owned chemical tankers,” said Darrell Crate, Managing Principal of Easterly Asset Management and MLEP’s Chief Executive Officer. “We’ve seen that the demand for such tankers has the potential to generate a high level of income for investors, and we continue to seek new investment opportunities in the shipping sector.”
Launched in September 2021, MLEP is taking advantage of the limited supply and growing demand for chemical tankers, a low future orderbook for new ship construction, and increases in trade. In addition to the four J19 stainless steel chemical tankers previously purchased, MLEP has acquired three coated tankers:
Easterly Hawk (built in 2008)
Easterly Osprey (built in 2009)
Easterly Falcon (built in 2009)
In November 2021, Easterly launched MLEP II, which has a goal of raising $150-250 million of equity. It plans to acquire all sizes of chemical tankers, including both stainless and coated MRs and handysize tankers, with the target of acquiring 15–25 vessels.
Both of MLEP’s investment tranches capitalise on shortages in tanker capacity brought about by growing global demand for the transport of bulk liquids such as palm oil, molasses, feedstock, and other commodities and the limited construction of vessels to provide such transport since the end of a construction boom in 2008. Since then, shipbuilders have concentrated on other types of vessels, and a lack of liquidity in the capital markets has meant that there is limited financing for new chemical tankers despite the demand.
MLEP is taking advantage of this supply/demand imbalance by acquiring 10-15-year-old tankers that still have years of productive life remaining. MLEP is putting these ships out for hire through WOMAR.
“This is a unique investment opportunity in that it not only addresses a true market dislocation in a difficult-to-access and opaque sector but also provides downside risk protection through residual scrap steel valuations at the end of the vessels’ lifespans,” said Mike Collins, Managing Director of Easterly Asset Management. “By working with an experienced partner such as WOMAR, we can maximise our ability to generate returns for shareholders.”