July 14, 2013 1:49 pm

Families will keep shipping buoyant, says Greek tycoon

One of the Greek shipowners least scarred by the past five years’ slump has said Greek families’ sense for the market and passion for shipping will ensure they play an important future role, despite an influx of private equity money.

George Logothetis was speaking after Wilbur Ross, the distressed debt investor, predicted in June that private equity would play a growing role in shipping and transform the industry’s culture.

Mr Logothetis’s privately-held Libra Group sold its shipping interests between 2004 and 2006 and re-entered the industry in 2009 after ship values slumped in the wake of the financial crisis.

Mr Logothetis told the Financial Times that private equity would “definitely” play a “larger role” in future.

“It’s a good thing, the diversification of the capital base,” he said.

But Greek private owners would play at least as big a role as at present, he went on.

“I don’t agree that Greek family shipowners will play less of a role,” he said. “To the Greek family shipowner, the ships are like his children. He will fight to the death if he has to protect them.”

Lomar Shipping, Libra’s shipping arm, currently owns 16 container ships and has another 12 new vessels on order. It also owns 10 carriers for dry bulk products, 14 specialist tankers and six vessels serving offshore industries.

The company was focused on container ships – which carry a variety of manufactured and semi-finished goods – because the trade was likely to keep growing, Mr Logothetis said. Unlike some other shipping segments, it was not dependent on one country.

“The dry bulk market is very dependent on China,” Mr Logothetis said.

However, Mr Logothetis also emphasised the role in family shipowners’ deliberations of a gut instinct for market movements, saying it could be more valuable than the detailed analysis of private equity investors. Mr Logothetis decided to sell the company’s ships in the middle of the last decade mainly out of an instinct that others were being overconfident. He re-entered the market in 2009 when others seemed to think it was hopeless.

“We need to look at cycles through the lens of psychology, more than through the lens of analysis,” Mr Logothetis said.

Like many shipowners from Greek families, Mr Logothetis has non-Greek citizenship, holding a UK passport. He is based in New York but said he had “a Greek soul”. Libra continues to have significant connections to Greece.

Mr Logothetis accepted that there needed to be some changes in Greek shipowning. Some Greek owners, for example, still keep accounts only on a ship-by-ship basis, rather than for their fleet as a whole.

“Evolution is necessary,” Mr Logothetis said. “Maybe some of the owners that aren’t running corporate balance sheets will convert themselves into corporate balance sheets.”

Mr Logothetis attributed his group’s discipline about the shipping market partly to its having a broader view of economic developments thanks to its diverse range of other businesses. Libra has recently entered the helicopter leasing market and is a long-term lessor of commercial aircraft to airlines. Libra also invests in hotels, property, energy and a range of other businesses.

However, while the focus in the shipping and aircraft businesses was on selling at the top of the market and buying at the bottom, helicopter leasing was mainly about growth, he said. The company also had an opportunity to affect the development of the nascent helicopter leasing sector.

Helicopter leasing also sat comfortably with the company’s shipping operations because the customers and market opportunities for its offshore vessels were often the same. The parent company had recently spotted, Mr Logothetis said, that, without realising it, the helicopter and ship leasing businesses were both working to supply the same offshore project.

“We told them [about the link],” Mr Logothetis said. “That’s where the linking of information at the parent level becomes really valuable.”

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