Shipping Funds

A Watery Grave for Billions of Euros

Your investment in action. Source: action press
Your investment in action.
  • Why it matters

    Why it matters

    Some shipping funds have gone bankrupt and burned €10 billion ($12.4 billion) in investor money, killing a once-model investment for the gray capital market.

  • Facts

    Facts

    • Closed-end shipping funds lured investors with promises of 8 percent annual yields.
    • Last year, some €22 million was invested in the shipping funds. In 2007 it was 150 times that.
    • Some shipping companies may list on stock exchanges in the future, experts said.
  • Audio

    Audio

  • Pdf

It is a mecca of the shipbuilding industry: the time-honored “Hansa-Forum” in Hamburg, the premiere gathering of container ship investors.

For years, the proud German companies who created and sold closed-end shipping funds dominated the annual meeting. They were the motor of the global container shipbuilding industry, collecting billions of euros from investors to finance the growing cargo business on the world’s oceans.

Most of the investors came from Germany. The classic closed-end shipping fund, promoted for tax reasons, was more popular in Europe’s largest economy than anywhere else. Germans invested a good €30 billion ($37.3 billion) in these vehicles in pursuit of generous yields. In doing so, Germans invested in half of the world’s container fleets.

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