QInvest, Qatar’s largest investment bank, and Fortis Bank Nederland are in advanced stages of launching a Shariah compliant mezzanine fund targeting financing opportunities in the marine transportation industry.
A mezzanine fund — a short term lending for long term benefit — is a type of private equity or merchant banking fund.
The proposed fund aims to raise $200m and will target mezzanine investment opportunities in deep sea vessels. The fund has an average life of 5 years and seeks to benefit from the down cycle of the shipping industry through an extended investment period of around 18 months. The fund targets to pay an attractive running cash yield and is structured to benefit from the potential asset appreciation on vessels through an equity kicker, said a statement issued by QInvest yesterday.
The new fund aims to capitalise on the significant dislocation the shipping industry has witnessed over the last 12 months. Further, by focusing on an alternative segment of the capital structure, the mezzanine level, investors are expected to benefit from asset coverage, quarterly cash flows as well as a structure that allows one to benefit from any capital appreciation on the underlying vessels.
The shipping fund is another Shariah compliant investment solution which QInvest brings to its investor base in the GCC region, and further demonstrates QInvest’s Islamic structuring and product innovation capabilities.
“Shipping asset values have been disproportionately affected relative to the global economic downturn. This combined with tighter credit markets, offers potentially attractive upside as the sector recovers, and we believe the fund will be well placed to unlock that value for our investors,” said Shahzad Shahbaz, CEO of QInvest. Fortis Bank Nederland is at the forefront of the ship financing industry and ranks amongst the most reputable in the market with more than $ 7bn of shipping assets under management.
“Our partnership combines QInvest’s structuring expertise with the specialist industry knowledge and global shipping network that Fortis Bank Nederland holds to provide an innovative investment opportunity for investors looking to diversify their portfolios,” said Shahbaz.
“The establishment of the Fund broadens the product offering for our shipping clients,” said Gust Biesbroeck, Managing Director Transportation within Energy, Commodities & Transportation.
Follow us on our social media channels: