Japanese investment firm ORIX has snapped up a portfolio of shipping loans from the Royal Bank of Scotland valued at €289 million.
A statement from the firm noted that “these current market conditions are a favourable investment opportunity” to purchase underperforming shipping loans from European banks.
Consolidation in the market is a result of a “prolonged downturn … triggered by a slowdown in growth in China and a resulting decline in demand”, ORIX said.
Further details of the transaction were not disclosed by the firm.
ORIX is a global investor with experience in the energy, infrastructure, automotive, real estate and shipping industries. The firm began investing in shipping in the 1970s.
Kiyoshi Fushitani, executive vice president at ORIX, recently told Reuters that it has an appetite to acquire portfolios valued upto €1 billion. “We want to buy investment-grade ones from European lenders,” he said.
Over the last 12 months a number of European banks have been looking to reduce their exposure to the struggling shipping market.
As a result, a number of credit funds have snapped up portfolios from banks. In August, KKR announced it had confirmed an agreement to purchase a portfolio of loans valued at €1.5 billion from German bank Norddeutsche Landesbank.
Pillarstone, backed by KKR, has appointed a number of shipping specialists to take advantage of the opportunities in the sector in recent months. Jens Martin Jensen, former chief executive of Frontline, joined the firm in November and shipping specialist Vasilis Theofanopoulos arrived at the firm at the end of last year.
Across the Atlantic, Northern Shipping Funds collected more than $500 million for a vehicle specifically targeting investments in the industry. The firm’s strategy is to invest in mezzanine debt in shipping companies based in North America, Western Europe and Asia-Pacific.