26-05-2021 George Soros buys into shipping while private equity giants continue sell-off, By Holly Birkett, TradeWinds
George Soros and other world-famous investors put their money in shipping companies during the first quarter of 2021, regulatory filings show. The Hungarian-American billionaire’s investment firm Soros Fund Management spent $39.3m during the first quarter in acquiring Golar LNG’s 2.75% senior unsecured convertible notes, which are due next year. The filings showed he held 40.25m of the notes, which accounts for about 10% of the bond issue. Private equity firm Oaktree Capital Management also holds around $8.3m of the same bonds. Soros Capital was one of 11 institutional investors who took on new positions in Golar’s unsecured bonds during the quarter, while two others sold off their holdings.
Earlier this month, filings revealed that famed “Big Short” investor Michael Burry acquired stakes in shipowners Golden Ocean Group, Genco Shipping & Trading and Scorpio Tankers during the first three months of 2021, as TradeWinds has reported. Bill Miller of Miller Value Partners was another famous name who upped his shipping investments in early 2021. His investment firm added an extra 49% to its existing stake in Norwegian Cruise Line Holdings’ stock and held 3.87m shares at the end of the first quarter — a holding worth around $106.8m. Filings show that the investment now accounts for just over 3% of Miller’s portfolio.
Meanwhile, Canadian private equity giant Fairfax Financial Holdings has slightly increased its holding in Atlas Corp, the group that owns containership tonnage provider Seaspan Corp. Fairfax, which is led by Prem Watsa, who controls around half of the firm, bought just under 169,700 more Atlas shares during the first quarter. Its total stake in the boxship owner was worth $1.36bn at the end of the period — almost half of Fairfax’s portfolio.
The big names’ newly disclosed investments come at a time when private equity funds are selling down their stakes in US-listed shipowners or exiting their positions completely — a phenomenon that has been dubbed “Prexit”. Oaktree has sold off around one-third of its holding in bulker giant Star Bulk Carriers this quarter. This means that Star Bulk is no longer the largest investor in Oaktree’s portfolio. The shareholding had been worth around $572.6m at the end of March, which accounted for 10.7% of the firm’s portfolio, US Securities and Exchange Commission (SEC) filings show. The private equity firm, which is led by Howard Marks, has long been Star Bulk’s largest shareholder and backer.
Star Bulk was formed in 2014 through the merger of Excel Maritime Carriers and Oceanbulk, which was owned jointly by Oaktree and Star Bulk’s chief executive, Petros Pappas. Oaktree sold almost 8% of its shareholding in Eagle Bulk Shipping during the first quarter, leaving the firm with 3.9m shares worth a combined $140.4m. This means Oaktree now owns just over 31% of the Nasdaq-listed bulker owner — down by 2%. Oaktree also holds convertible bonds in Eagle Bulk, as well as in US-listed Ardmore Shipping, SFL Corp, Scorpio Tankers and Seacor Holdings. Its other long-standing shareholding — tanker company Torm — accounts for 9.2% of Oaktree’s investment portfolio and was worth almost $492m at the end of the first quarter.
Earlier in March, Eagle Bulk’s second-largest holder — GoldenTree Asset Management — sold more than 3.6m convertible notes in the company, generating more than $4m. GoldenTree, which is headed by its founder Steven Tananbaum, owned 24% of Eagle Bulk at the end of the first quarter, much unchanged from three months earlier. Bulker owner Genco has seen its top three shareholders reduce their combined holding in the company from 58% to 20% this year, as TradeWinds has reported. Centerbridge Partners, Strategic Value Partners and Apollo Management Holdings began selling their shares in December 2020. SEC filings confirm that Strategic Value Partners has completely exited its Genco investment, selling all of its 8.2m shares in the company during the first three months of 2021 — a stake that had been worth around $60.1m at the end of last year. The SEC filings also show that Apollo has reduced its Genco holding by 91% over the same time frame and had 399,651 shares by 31 March. Centerbridge Partners has reduced its stake in the shipowner by just under 20% since the end of 2020. Its holding stood at 6.29m shares — or 15.02% of Genco — at the end of the first quarter.