Money, Money Everywhere – The Award for Private Equity

There was no shortage of great deals this year. The difficulty was in categorizing them and nowhere was that more apparent than in the private equity category. The classic private equity deal in shipping was the Carlyle acquisition of Horizon Lines. It clearly met the parameters of buying a non-public business, fixing it up and exiting profitably. However, private equity’s money is omnipresent while deals are few and far between. And, as we know, money moves to wherever the deals are. So, how do you, for example, treat Morgan Stanley’s strategic acquisition of Heidmar no less the Ontario Teacher’s Pension Plan’s purchase of OOIL’s US ports? With the blending of categories are these more M&A than PE? Is it PE because these are financial buyers rather than strategic buyers? And where does a long-term hold view versus flipping fit in? Contributing to this vagueness was a dearth of pure private deals as a consequence of strong shipping markets and even higher valuations. This was no time to buy-in on asset plays. There are no clear answers but more on this later.

The editors have taken the strictly conservative view and awarded the private equity award to Cantor Fitzgerald, CRT Capital Group and Oppenheimer for Paragon Shipping Inc. in what may have been the only time last year a private company issued equity in a private placement. More than just fitting expected parameters, it is a structural gem taking the best from a Chinese menu of alternative structures.

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