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SWOT ANALYSIS
Growing world population and emerging
economies creating strong demand drivers
Essential sector for global industry and growth
Supported by the UK Department for Transport
Potential for significant capital growth with
the right investment, at the right time and
the right exit
Market volatility – very sensitive to
macroeconomic and political factors
Exposure to potential currency fluctuations
Potentially costly nature of ongoing
requirements for environmental/safety
upgrades
Most environmentally friendly method
of transporting goods and ongoing
improvements taking place
Real asset with safety net of scrappage to
partially offset potential capital loss
Long established business – with strong
history of long term growth driven by
proven drivers – e.g. globalisation, emerging
economies, world population growth
Accessible industry expertise
through UK owners and operators
Smaller scale private investors
have only recently started to
become fully aware of the market
Reduced availability of bank funding
Very complex market for the poorly
advised amateur – requires appreciation
of cyclical market with all of the global and
local demand factors
Over-supply of vessels, depressing
charter prices and ship values
Use of debt
Access to Dry Bulk shipping has historically been
largely limited to institutions, corporations and
private equity firms with access to the significant
funds and knowledge required to enter the market
Deterioration of general market conditions
which directly impact demand factors – e.g.
continued Chinese economic slow-down
Opportunities at the bottom of the
market when upturn is predicted
and eventual upswing in Dry Bulk
charter rates and vessel values
Concentration on one specific
sub sector of shipping – lack of
diversification
Availability of political support in the
form of UK Tonnage Tax and eligibility for
state aid and qualification for incentivised
investment schemes such as EIS and VCT
Inexperienced managers
if not carefully selected
Significant market data allows for
identification of most cost-effective
vessels and risk mitigation strategies
No guarantee of interested third parties to
acquire the asset at the desired price and
facilitate investor exit at expected level
OPPORTUNITIES
THREATS
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STRENGTHS
WEAKNESSES