Cambridge: Manish Singh, chairman of consultants Ideocean as well as the Cambridge Academy of Transport has announced his return to V.Group as group director for strategy and M&A.
V.Group, a leading marine services provider, has an established track record of successful acquisitions including the recent purchase of Singapore based marine and offshore inspection, repairs and maintenance business, Core-IRM.
Whilst declining to elaborate on future acquisition plans, Singh stresses that the M&A agenda at V.Group is “simple”.
“In seeking potential partners, V.Group looks for businesses with experienced and committed management teams that add expertise and a track record in technical, operational and commercial performance assurance,” Singh says.
The opportunities being considered, he reveals, range from broad based international service providers to niche service companies with specific skill sets.
“The litmus test is whether the acquisition creates further efficiencies, greater service coverage and a superior solution to marine or offshore asset owners,” Singh says.
Much has been said recently about the role of private equity (PE) in the maritime sector. In the case of V.Group, Singh says, “It has been demonstrated through our successive PE backed growth phases, including, currently, with OMERS Private Equity, that a committed private equity partner brings considerable expertise, governance and resources, that a dynamic management team could leverage on”.
Private equity investment in shipping is touching new heights with estimations of as much as up to $40bn of PE funds being directed to the industry, much of which is going into opportunistic ordering of new tonnage.
“The magnitude of this ordering will sharply add tonnage supply and could well stifle or delay any sustained recovery,” Singh reckons. “The short- to mid-term exit horizons of a typical PE investment would mean that some PE backed shipowning outfits are likely to match exits to favourable market conditions and may see unfulfilled returns for some investors who are only in for the short run and uncertain market conditions for the wider long term stakeholders.”
Service businesses on the other hand offer a different set of investment rationale, Singh points out, and are more likely to benefit from the investment and strategic involvement of PE partners.
Reflecting on the recent shipmanagement poll carried out by Maritime CEO, Singh comments, “The survey highlights that cost competitiveness remains a primary decision criteria but clients value service assurance, reputation, quality of people and relationships that their service partners offer”.
Responding to one survey quote he disagrees with, Singh comments, “Shipmanagers and marine service providers manage considerable risks for asset owners. So of course they have to excel in crisis management. But inferring that this means risk prevention is not their forte is totally missing the point. The efforts of leading marine services businesses and bodies like InterManager have ensured the industry as a whole has seen significant improvements in risk management and incident prevention.”
As far as the Cambridge Academy of Transport goes, Singh retains a non-exec involvement with the UK institution.
“The management team at Cambridge Academy of Transport is in active dialogue with strategic partners with whom the business aims to propel from a niche and highly respected name in maritime executive development to a leading knowledge services business in our sector,” Singh says. [29/09/14]