22-11-2021 Heavyweight investor Fidelity reveals $24m stake in Tufton Oceanic, By Gary Dixon, TradeWinds
US financial giant Fidelity has unveiled a major investment in UK shipping fund Tufton Oceanic Assets as it continues to build its shipping portfolio. The Boston-based investor said in a UK stock exchange filing that it now owns a 5.55% stake in the London-listed tanker, bulker, and containership owner. This slice is worth $23.8m based on a market cap of $429m. The shares were acquired during Tufton’s latest over-subscribed $39m tap issue of stock as the shipowner raises more funds for vessel acquisitions. Market sources said Fidelity did not have a stake in Tufton before this.
Tufton itself told TradeWinds: “The tap issue had both new and existing investors participate and was oversubscribed. As a matter of policy, we do not comment on any specifics other than that we love all our investors past, present and future.” But the company said it is “very pleased” with the equity raise. “We believe investors are very drawn to our strong portfolio and commitment to reallocating capital within shipping as markets evolve,” Tufton added.
A spokesman told TradeWinds that the portfolio is split roughly into thirds between tankers, containerships, and bulkers, with average charter cover of two years. “A lot of investors appreciate this at a time when there are headlines about the BDI falling dramatically,” he said. “A lot of really great investors are backing Tufton at the same time the drop in the BDI is in the press, which means they really understand and appreciate what we are doing and that we are also putting in more of our own money in the fund every time it grows,” he added.
In August, mammoth Boston-based institutional investor Fidelity disclosed a $207m position in shipping’s largest US-listed dry bulk shipowner, Star Bulk Carriers of Greece. Fidelity’s enlarged stake is 10% slice of the Petros Pappas-led company, making it the second-largest holder after private equity’s Oaktree Capital Management, which has 26m shares and a 25.4% stake. TradeWinds reported on 13 July that Fidelity had built up a 12% stake in New York-listed Genco Shipping & Trading, allowing it to move past another private-equity backer, Centerbridge Partners, as the bulker owner’s biggest investor. Fidelity also holds 4.2m shares in John Fredriksen’s Golden Ocean Group worth about $44.5m, 422,000 shares in Eagle Bulk Shipping valued at $19m, 888,000 shares of Safe Bulkers worth $3.3m and 387,000 shares in Diana Shipping valued at $1.9m.
In July, two big UK investment funds sold down stake’s worth about $15.6m in Tufton Oceanic Assets after the stock price rose 33% over the past year. London’s Pictet Asset Management said it had cut its stake from 9.23% to 4.64% on 19 July, with 12.5m shares left. And UK-based Newton Investment Management reduced its holding from 5.22% to 4.85%, retaining 13.1m shares. This is a combined disposal of about 5% of the shipowner. In Tufton Oceanic’s latest annual report covering the period to June 2020, Pictet was ranked third and Newton sixth in the list of largest shareholders. South Yorkshire Pensions Authority is top on 10.81%, with East Riding Pension Fund second with 9.71%.