The private equity firm KKR said Tuesday it has formed a new business, Maritime Finance Co., that will focus on lending to the offshore oil field services and traditional shipping sectors to "fill a void left by exit of traditional lenders."
Led by former Helios Advisors partners Kristan Bodden and Gabriel Tolchinsky, Maritime Finance will initially be capitalized with $580 million of equity, over 45 percent of which has been provided by KKR.
Bodden, who will be chief executive of Maritime Finance, said "this is an area that has historically been served by European banks. The current dislocation in the European banking sector has created a substantial funding gap in maritime asset financing. With Maritime Finance, we are capitalizing on an opportunity to fill an obvious void while at the same time aiming to provide compelling returns and attractive yields for our investors."
KKR said according to AMA Capital Partners, a merchant bank that specializes in the maritime industry, "over $220 billion of debt capital is
required by the maritime sector through the end of 2014 and an enormous
capital commitment is required to deliver the current maritime
orderbook. Total offshore and shipping orderbooks are valued at $238
billion at cost and the lack of financing is impacting orderbook growth
KKR, founded in 1976 and led by Henry Kravis and George Roberts, had $83.5 billion in assets under management as of June 30.
In a speech earlier this year, investor Wilbur Ross predicted private equity investment in shipping could double by next year
. - Chris Dupin