Knowledge

 

The investor holds a stake in the ship fund through a limited partnership and is therefore co-owner of a company that purchases a ship and then charters it. The ongoing costs are financed by the charter rate. Investors receive a share of the economic and tax results and the proceeds from a sale of the ship.

 

Ownership Treuhand GmbH (trust company) acts as the interface between the shipping company, the banks, the issuing house and the investors and represents the interests of the investors.

Ownership Emissionshaus GmbH constructs the overall concept, brings together the participating partners and distributes the investments to retail investors via qualified distribution partners.

Auditors and lawyers provide the shipping line with consulting services with regard to legal and tax questions.

The shipping line purchases the ship, commissions the issuing house with procuring the equity capital and obtaining the loan capital. It consists of at least a single-ship company, which may be founded within an umbrella fund or a fleet fund.

The shipping company is responsible for managing and operating the ship (the crew, concluding insurance policies, providing the required equipment, maintenance and upkeep).

The distribution partners can be independent or institutional financial consultants who advise the investors. They represent an interface between the investor of and issuing house.

The banks provide the loan capital in order to finance the ship.

The chartering party is the tenant or leaseholder of a ship for a defined period of route. He pays the charter rate as remuneration.  

 

 

A ship is financed using equity capital and loan capital. The sum of the loan capital is provided by a bank, generally accounting for between 60 and 75% of the ship shareholding. The equity capital (between 40 and 25%) is raised by the investors.

In addition to the money required to purchase the ship, the entire investment volume also consists of additional costs required in order to design a ship shareholding. Among other things, these include costs related legal and tax advice and the issue of shares for the company. The bank’s investment volume is higher than that of the investors, as it generally expects lower profits than the investors. Therefore, this comparably “cheap” loan capital leads to a higher return on equity for the investors.

The diagram printed below is an example of a ship shareholding with an investment volume of 11m euros: the cost of building the ship is 10m euros, whereby additional costs of 1m euros are accrues. The bank provides 7 million euros and the investors raise 4m euros. The bank loan is paid over the course of the fund period of 15 years and the ship is then the sole property of the investors. On average, a ship has a commercial service life of around 25 years. After the end of the fund period of 15 years, it therefore still has a theoretical residual value of roughly 40% or 4m euros – the actual residual value is subject to market fluctuation with regard to supply and demand and may indeed be lower or higher - and it can be used for a further 10 years. The private investors will receive this sum by selling the ship, as the bank loan had already been repaid. Therefore, in addition to ongoing dividends, the ship represents a good substance that can only be found among investments in material assets.