QInvest, Fortis set up $200m shipping fund

Qatari investment bank QInvest said on Tuesday it is setting up a $200 million fund with Fortis Bank Nederland to buy shipping assets, taking advantage of falling prices in the maritime sector.

The five-year mezzanine fund, which will comply with Islamic law, will be invested over the next 18 months, QInvest said in a statement.

"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," QInvest, a unit of Qatar Islamic Bank, said.

International shipping has been knocked hard by the global economic downturn, largely due to overcapacity caused by a construction boom that took place before the slump began.

But unlike container shipping, tanker markets have suffered less despite a slump in global oil consumption.

Global shippers have placed orders equivalent to 40 percent of current world product tanker tonnage, but with 16 percent of tonnage being scrapped due to a ban on single-hull ships before 2012, overcapacity does not present the same problem to tanker shippers as bulk and container shipping.

Qatar Shipping Co (Qship) said in August it planned to buy ships and companies over the next 18 months, as prices in certain segments of the market have fallen 50 percent from their peak in mid-2008 and may fall further.