Greywolf Capital Management has announced the final close of its Greywolf Containership Opportunities Fund II, with approximately $120 million of committed capital.
James Kelly, Greywolf managing director, leads its maritime strategies. In an interview with Private Debt Investor, Kelly described a strategy analogous to the sale-and-leaseback financing often used in the aviation context. “This is hard-asset ownership,” Kelly said. “The fund directly owns ships. We acquire ships in the middle of their useful life, often with existing leases to major commercial operators for periods of between 18 months and three years, providing income on top of underlying asset value.”
Greywolf, headquartered in Purchase, New York, is an alternative asset manager with approximately $4 billion in AUM. Chief executive Jon Savitz said in a statement on the close: “At Greywolf, we target niche opportunities to take advantage of particular stresses in markets. Our maritime strategies are an excellent representation of that approach.”
In addition to shipping, Greywolf also employs distressed, event-driven and CLO credit strategies. It has $4 billion in AUM.
“The underlying business is of course cyclical,” Kelly said, referring to the fact that as demand for products rises or fall in line with macroeconomic trends, the transport sector has to expand or contract its fleets.
“However, our strategy seeks to minimise downside by focusing on entry price and contracted cashflow. When leases come for renewal, we’ve materially covered our downside and are less worried about where in the cycle we are.”
This is Greywolf’s second commingled maritime fund and its fourth overall, Kelly said. He is positive about the idea of further funds. When speaking to PDI, he said the decarbonization trend in marine shipping was one reason, as it “will create a number of opportunities as vessels are retired or need to be retrofitted”.
The fund was brought to market by Briarcliff Credit Partners as placement agent.