EnTrust Global commits to green ship finance

US alternative asset management firm EnTrust Global said it has completed fundraising for its EnTrust Global Blue Ocean Funds for investment in the global maritime industry.

Illustration. Image by Navingo

The Funds closed at $2.1 billion after raising $925 million since April 2020.

The Blue Ocean Funds are part of EnTrust Global’s private debt and real asset division. The Funds engage in direct lending and similar financing opportunities to vessel owners and operators and other maritime businesses.

“We continue to see strong demand for our debt capital solutions from clients around the world,” Svein Engh, Senior Managing Director and Portfolio Manager of the Blue Ocean Funds, said.

“We are grateful for the strong support from our investors during a volatile market as the economy has navigated the pandemic these last six months,” Gregg S. Hymowitz, Chairman and CEO of EnTrust Global, commented.

“As evidenced by the growth of our platform, and the addition of Julian Proctor earlier this year to lead a new, environmentally-focused shipping initiative, we continue to believe there are compelling opportunities in the maritime industry and in real assets in general.”

“Vessel owners and their customers and end-users are increasingly focused on the impact of the shipping industry on the environment, and especially on carbon emissions, but there is inadequate financing for the industry to move to cleaner, more advanced technology,” Julian Proctor, who with Engh heads EnTrust’s new initiative focusing on environmentally-advanced vessels, added.

“I am excited to lead EnTrust’s initiative to create financing solutions for vessel owners that will help transition the shipping industry to a more sustainable future.”

Back in 2018, the International Maritime Organisation (IMO) adopted an initial strategy on the reduction of GHG emissions from ships by 50 per cent when compared to 2008 levels.

In order to achieve decarbonization goals, the shipping sector needs different sources of financing available. An increasing number of regulations, especially those targeting environmental issues and climate change, have made shipping finance complex and unattractive given all the risks involved.

Last year, eleven founding banks launched a new global framework for responsible ship finance which help incentivize shipping’s decarbonization, named the Poseidon Principles.

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Specifically, the principles enable financial institutions to align their ship finance portfolios with responsible environmental behavior and incentivize international shipping’s decarbonization. Signatories measure the carbon intensity of their shipping portfolios on an annual basis and assess their climate alignment relative to established decarbonization trajectories.

Earlier this month, 15 signatories of the Poseidon Principles released their first green financing report showing that ship finance portfolios of three banks are aligned with the UN decarbonization goals while those of the remaining 12 banks are not.