Mr Pasialis highlighted the sector’s promising future, driven by a moderate influx of newbuilds over the next 1-2 years, particularly in the smaller geared tonnage segment, alongside the current geopolitical landscape.
“There is a growing appetite among major operators for long-term charters, underscoring strong confidence in the market’s future performance,” Mr Pasialis remarked.
Alpha Omega’s managing director highlighted the easing of interest rates as a bullish factor for investments. He pointed out traditional asset classes such as real estate are offering diminished yields.
“The shipping sector’s potential for yield generation, combined with favourable market fundamentals, makes it a compelling option for capital allocation in the current environment,” Mr Pasialis added.
Eco versus non-eco
When discussing the optimal investment strategy in the dry bulk sector, Mr Pasialis emphasised the relationship between earnings and asset prices currently varies depending on vessel size.
“The geared tonnage segment, in particular, shows a more favourable balance compared with other points in the market cycle,” he observed.
Mr Pasialis also pointed out the significant price difference between eco and non-eco vessels. “The current market often prioritises engine type over total emissions output, which tends to overshadow the crucial role of hull design,” he explained.
He cited Alpha Omega’s recent acquisition, the Ultramax As One, as a prime example. “Although the vessel is equipped with a conventional engine, it features an advanced hull design for its era, resulting in performance metrics that match or even surpass those of younger vessels with electronic engines,” Mr Pasialis said.
The inflation factor
Mr Pasialis also addressed the impact of inflation on asset prices. “When adjusted for inflation, one could argue current valuations are not excessively high,” he told Riviera.
However, he noted inflation becomes less influential when supply and demand dynamics come into play, leading to distressed asset sales, as seen during the market correction in 2016.
“It’s important to recognise that during such downturns, the volume of ‘quality and modern’ assets sold at rock-bottom prices was limited, often coinciding with low levels of newbuilding activity,” Mr Pasialis observed.
Alpha Omega’s profile
Based in Singapore, Alpha Omega is a newly established investment vehicle in the maritime industry, cofounded by Mr Pasialis and Vasileios Pateras, a third-generation representative of the Pateras family. The company currently owns two bulk carriers – an Ultramax and a Handysize – built in 2013 and 2014, respectively.
The Alpha Omega team brings with them a long-standing track-record of navigating and identifying key shipping investments.
