PARTNER CONTENT
Oceanic Investment Management, which launched the Oceanic Hedge Fund (OHF) in 2002, utilises a unique analytical toolkit to invest in the shipping and energy sectors. Cato Brahde, the firm’s CIO, outlines the firm’s investment strategy, what sets it apart from other investment managers, and how the firm is positioned to deal with disruption in global shipping and energy markets.
Describe your firm’s flagship investment strategy and what makes it special?
OHF invests in long-short equity, bonds, commodities and freight, in the shipping and energy sectors. The fundamental book focuses on long-term supply/demand trends, utilising sector and company models to underpin stock selection. The short-term strategy utilises proprietary vessel tracking and prediction software, “TRACS”, which provides real-time tracking of all ships on the water. As a specialist fund manager, we know the companies in our sectors very well and meet with their respective management teams on a regular basis.
What are the three key selling points of your business and product range?
The firm has a deep understanding of the shipping and energy market cycles, including a database of long term and real time cycles from 40 years of research and 12 years of real-time data. OHF provides low correlation with equity markets and has a track record of preserving capital in downturns. It has generated strong risk-adjusted returns over the last five years.
What economic forces – in Europe and/or globally – do you anticipate having the biggest impact on your investment strategy over the next 12 months?
Top of the list is a potential global recession, while geopolitical events including the current situation in the Red Sea, the Middle East, and OPEC, also have the potential to lead to disruption in shipping and energy markets. In addition, changes to global trade patterns (due to reshoring, nearshoring and energy security issues, for example), as well the implications of the IMO (International Maritime Organization) regulations and their impact on the global fleet, are on the firm’s radar. Shipping is now required to reach net zero by 2050, leading to a phase out of old tonnage and a new cycle of investment in new ships and technologies.
How are you preparing for the above?
By employing on-going, detailed analysis of supply and demand within the shipping and energy sectors, as well as real-time and global monitoring of all ships on the water, using “TRACS”. We also run a low-Beta portfolio through the judicious use of natural, index and market hedges.
In relation to your flagship fund’s investment portfolio over the last 12 months, what trade, investment, or innovation are you most proud of?
The expansion of OHF’s short-term trading strategy, based on “TRACS” output, is a major achievement for the firm. The firm has been developing “TRACS” since 2011 and can now call on comprehensive data accumulated over this period of development, to help inform investment decisions. OHF’s short-term strategy complements the longer-term fundamental strategies, leading to improved risk-adjusted returns.
Cato Brahde, Chief Investment Officer, Oceanic Investment Management – Cato joined Tufton Oceanic in 1989 where he was responsible for the group’s shipping investment fund and individual investment accounts with a total of 50 ships. He co-founded Oceanic Hedge Fund in 2002. Cato has held several non-executive directorships of private and public shipping companies. Prior to Tufton Oceanic, he worked as a Naval Architect and Project Manager with Brown and Root in offshore construction projects, from 1978 to 1989. Before that, he served as an Officer in the Royal Norwegian Navy. Cato holds an MSBA, a BSc (Hons) in Naval Architecture, a diploma in Company Direction and is a Member of the Royal Institution of Naval Architects.
