What do you make of a company named after a number that is greater than anything that can counted? You would be impressed, right? Well of course you would be. Especially if you were Arrow, Maersk Broker, SSY or BRS, because they are, so much so, according to Splash 24/7 at least that they are partnering up with Infinity as it ”bids to create a new shipping investment vehicle enabling fractional ownership of cargo ships.”
I like Splash 24/7, and I think they have a sly and often hidden sense of humour, which I would love to see more often. But I don’t think they had to do much with the press release it was fed on Tuesday, which is full of unwitting humour in itself, and didn’t need much embellishing.
Let me try and explain. As far as I can.
Infinity Marine will create Meta Units of the ships it will buy, that will be tradeable. This will mean that there will be a secondary market for investors in ships.
A ‘Meta Unit’ will (according to Infinity’s website):
digitally represent a fractional ownership share in a portfolio of ships that forms part of the Infinity platform.
Got that? You get a shareholding in a ‘portfolio of ships’ – I guess that’s a share in a fund? – which is part of a platform. What part of the platform is not clear.
Eventually, the Meta Unit will evolve and have the flexibility to allow investors to diversify their holdings across different categories of ships, as well as other elements of the shipping ecosystem, including derivative products for trading on specific routes, freight rates and vessel values.
This is actually what the website says. It says the Unit will evolve (caused by a meteor crash? global warming?) and become more flexible across different sectors. Does this mean I can change my dry bulk Meta Unit into an LNG Meta Unit, or boost them into FFAs, or even hedge them on their future trading value? Sounds exciting.
Ultimately, Meta Units will be open for secondary trading on Infinity’s regulated digital asset exchange.
Ah the holy grail. Ultimately, there will be secondary trading on a regulated (regulated by whom? Infinity?) digital asset exchange. Oh I forgot: these ships will be sustainable, via the purchase and further upgrade of modern vessels, in line with the Poseidon Principles for sustainability. ESG box ticked right there. Well done.
So far so fantastic. So what will the Fantastic Four (SSY, BRS, Arrow and Maersk Broker) be doing? They will be supporting Infinity (the company, not the concept) by sourcing suitable and available ships, either as single assets or portfolio transactions (translation for the less excitable, or modern: they will be suggesting ships for sale, individually or en bloc, something that they kind of do already, or at least I hope they do). The Fantastic Four will be focusing on modern ultramax and kamsarmax bulk carriers, especially those with the lowest carbon footprint (translation: ME main engines built or designed in Japan). So far so normal. What else?
In addition to the sale and purchase of vessels, the brokers will also have the opportunity to offer chartering services, undertake market research and trade meta units. They will also be part of a panel who will continuously value the ships and portfolios.
Hardly groundbreaking stuff. So why the press release for doing something that shipbrokers routinely do, day in day out? Well Jesper Bo Hansen of Maersk Broker Advisory Services may be able to shed some light:
Alternative financing and lending has become a common, recurring theme over the last couple of years in the international ship finance industry.
Yes a recurring theme, short of any actual action.
We believe different kinds of securitisation will be part of the future alternative financing landscape and believe the Infinity Maritime Meta Unit could develop into being an interesting market alternative for financiers and investors in the maritime industry.
Is this in the amoeba, trilobite or the Ultimate Infinity version of the Meta Unit? Hard to say.
We are confident that we can secure a steady deal flow of sustainable assets to the Infinity platform and look forward to cooperating with the Infinity team.
Translation: they will get our circulars for modern ultramax and kamsarmax vessels for sales.
Andrew Graham, chairman of Infinity Maritime goes further:
Infinity’s ambition is to reinvigorate the maritime ecosystem – not disrupt it.
I am not sure what Mr Graham means by ‘maritime ecosystem’. Does he mean it in the biological way, like fish and crabs and seaweed and stuff? Or does he mean it in the techie way, like software and digital, and modern stuff? I suspect, sadly, the latter.
We are pleased to demonstrate our progress towards sourcing our first fleet of sustainable dry bulk carriers by announcing our collaboration with an initial group of the most progressive shipbrokers, who will also work with us to trade the Meta Units which investors will own, representing the value of the vessels in the portfolio.
This is the killer sentence for me. Let me break it down:
– We are making progress by announcing that we have talked to a bunch of shipbrokers, who will put us on their circular lists
– These are progressive brokers, not in the liberal, woke sense of the word (anyone who has been to an SSY partners meeting will certainly confirm this), but progressive in that they bought our story, and will follow it for a while, without actually investing anything in it.
– They will work with us to trade the Meta Units, once we have figured out a way to make them evolve.
I don’t know whether to laugh or cry, whether at the unoriginality of the idea (ships used to have 64 shares which could be traded), or the murder of the English language to give a hyped up, modern feel. I trawled through the Infinity website to see if I was being unfair, and spotted the ‘For Brokers’ tab:
– Regular Meta Unit trading creating multiple sales per vessel
– Market appraisals as part of an established Valuations panel
– Data analysis generated by fleet volume across different ship types
– FFA’s on Meta Units created by trading derivatives
– Generating liquidity through secondary trading
– Increased Sale and Purchase and Chartering activity
– Connecting with the whole maritime ecosystem
I fail to see how any of this actually benefits the broking community, especially when the one of the stated benefits for assets owners is to reduce middlemen and intermediaries. Multiple sales per vessel? Increased chartering activity? I’m sorry, it doesn’t add up. And If I want to connect with the whole maritime ecosystem, I can either pick up the phone and call someone, or in fact, just go for a swim in the sea.
I am still unclear about why we should digitise maritime assets, and start trading them, which is the stated aim of Infinity Maritime. Cui Bono? Who benefits? Strip away all the green, digital, techie bling and language, and you find a venture trying to get into shipping by getting other people to get into shipping. But that said I cannot find anything anywhere I can buy either a Meta Unit, or a Mini one, or even a share in Infinity Maritime, so maybe I am not the target candidate here. The website confirms this:
Liquidity will come from investors who will be directed to the platform initially through three main investor channels: ship brokers, ship owners and family offices.
Not for me then.
In my view, if you want liquidity, go and buy shares in Pacific Basin or Safe Bulkers. If you want to own a ship, start saving or start making very wealthy friends, or meet other coinvestors. If you want to succeed in shipping, go do something worthwhile, and well. I wish Infinity Maritime well, I just wish I knew what they were trying to do. One thing is encouraging however: even the most Infinity minded company has released that they need shipbrokers. There is hope for us in the maritime ecosystem yet.