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Dee4 Capital: Short-term market dislocations coupled with long-term value

Carsten Mortensen is back, hunting product tanker opportunities with a new fund.

The former CEO of both BW and Norden has teamed with well-known shipping private equity professional Freddie Lee to create Dee4 Capital Partners, which started off in the summer by closing a $41m capital raising exercise, with further capital to be raised during 2019.

“The fund’s core strategy is to identify and execute transactions where Dee4 Capital sees short-term market dislocations coupled with long-term value, and hence a superior risk-reward balance. The short-term investment focus is on the product tanker market, given the attractive supply and demand dynamics,” the company stated in a release upon first closing.

Dee4 Capital pounced immediately to acquire three product tankers, a sector it is squarely focused on at present. The tankers were bought from Japanese owner Nissen Kaiun and financed by DNB. “We are delighted to have received the support from DNB to finance these vessels, and look forward to a long collaboration with them and other financing institutions as we grow”.

“Product tanker investments are a core target for us at the moment and we will do more in that sub-sector,” Lee tells Maritime CEO. Other maritime opportunities and related sectors are not being ruled out however, as the mandate for the fund is fairly broad.

Lee has to date spent more than 18 years in the private equity investment industry, including as an investment committee member of Barclays Natural Resource Investments (BNRI), with whom he led investments inter alia in shipping, logistics and energy. Whilst with BNRI, he co-founded Hafnia Tankers and was an advisor to the company until 2019, helping to complete the merger with BW Tankers; he also co-founded CIG Logistics, a Texas-based energy infrastructure group.

It was during the merger process between Hafnia and BW Tankers where Lee first came across his new business partner, Mortensen, who is one of the best known names in Danish shipping.

“Carsten wanted to create a new investment entity with a Danish flavour to it. He is very well respected and liked, particularly in the shipping community and this was critical in terms of getting Dee4 up and running,” Lee explains.

Dee4’s first fund will be relatively small and that was deliberate as Lee explains.

“We did not want to be on the road fundraising for months,” he says. “The idea was to get off to a running start deploying capital immediately with the acquisition of three product tankers and develop a track record, proving to our investor base we can complete attractive transactions and prove the investment thesis, whilst operating in a professional and transparent manner.”

Dee4’s investors to date are broadly split into two categories: senior business people, mainly from the maritime community, and family offices or foundations.

“We are extremely proud of all those investors who have committed to Dee4, and the faith they have placed in us. In a very short period of time, we have raised a fund, hired colleagues, found an office, acquired our first assets and we are now on the hunt for additional attractive opportunities. We are all highly committed to the business and we are having fun,” Lee says.

Once the first fund is largely deployed, Dee4 intends to start raising capital for Dee4’s second fund, which will be targeted at a significantly higher level, Lee admits, giving Dee4 “more firepower”.

This article first appeared in Maritime CEO magazine. Splash readers can access the full magazine for free online by clicking here.


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