A Private Equity Success

Over the past five years a savvy group of former senior Wall Street investment bankers, high level US government appointees, and major military and industrial complex chairmen, board members and senior executives, now heading up different private equity firms, all saw similar potential where for the previous 20 years “mom and pop” enterprises had more or less just puttered along – the US maritime industry. Is this a trend that will continue or simply a series of unique transactions, products of specific circumstances not likely to be replayed? Either way there is no doubt that a group of private equity firms saw value and grabbed it.

Since way back in 1986, when the US Congress at the misguided behest of US maritime unions altered the US Tax Code, the US maritime industry had shrunk. Periodic hand wringing at the loss of jobs, threats to national security and the occasional shipyard incentive not withstanding, the US maritime industry moved ahead under the radar, a back water sub-segment of the international shipping industry. That is until recently when the above-mentioned executives saw opportunity in a protected fleet attached to a consistently consuming US market. Age, labor and costs were no barriers.

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