World-renowned investors Michael Burry and George Soros bought more shares in shipping companies during the second quarter, while Howard Marks' Oaktree Capital Management continued to reduce its shipping exposure.
Legendary investor Burry, made famous by the film The Big Short, more than doubled his holding in product tanker owner Scorpio Tankers during the period.
He also raised his stake in bulker owner Golden Ocean Group by 32%.
Scion Capital Group — Burry's California-based private investment firm — held 600,000 shares in Scorpio Tankers as of 30 June, up from 190,100 shares at the end of March, according to filings with the US Securities and Exchange Commission.
Scion Capital also owned 700,000 shares in Golden Ocean worth around $7.7m at the end of the second quarter.
Burry was one of the first investors to call and profit from the 2008 subprime mortgage crisis, which was immortalised in the 2015 film and the book of the same name.
Scion Capital bought shares in bulker owners Genco Shipping & Trading and Golden Ocean and in Scorpio Tankers during the first three months of 2021, marking Burry's first shipping investments.
But Scion Capital sold all of its 354,711 Genco shares during the second quarter.
Shipping stocks accounted for just over 10% of Burry's portfolio as of 30 June, but the investment in the sector has since fallen to 1% in terms of value.
Scion Asset Management's second-quarter disclosure shows the fund had $2.1bn in managed 13F securities during the period.
Soros, meanwhile, has dipped his toe into dry bulk equities by buying a relatively small tranche of shares in Eagle Bulk Shipping.
Soros Fund Management — the Hungarian-American billionaire's investment firm — spent around $786,000 in buying 16,618 shares in the Connecticut-based bulker owner during the second quarter, filings show.
Soros bought a slice of Golar LNG's debt in early 2021 by acquiring its 2.75% senior unsecured convertible notes, which are due next year.
The filings show no change in his holding of 40.25m of the notes, which accounts for about 10% of the bond issue as of 30 June.
Private-equity firm Oaktree also holds around $4.6m of the same bonds, almost half as much as it did at the end of the first quarter.
Well-established investor
Long-standing shipping investor Oaktree continued to reduce its exposure to bulker owners during the second quarter by selling off shares and bonds, while upping its investment in a major miner.
The private-equity firm has this year reduced its holding in bulker owner Star Bulk Carriers by one-third to just under 26m shares, most of which were sold during the second quarter.
Oaktree subsequently owns around one-quarter of Star Bulk's outstanding shares.
But though the number of Star Bulk shares owned by Oaktree has fallen, the value of the investment has grown by 73% since the end of 2020.
The stake was worth around $596.5m as of 30 June.
Super-strong bulker markets have helped lift Star Bulk's share price by 138% this year to date. The Nasdaq-listed stock was trading at $21.06 as of mid-morning in New York on Tuesday.
Oaktree, which is led by Howard Marks, has long been Star Bulk's largest shareholder and backer.
Star Bulk was formed in 2014 through the merger of Excel Maritime Carriers and Oceanbulk, which was owned jointly by Oaktree and Star Bulk’s chief executive, Petros Pappas.
Oaktree also sold a further 2.7% of its holding in Eagle Bulk during the second quarter, which stood at just below 3.8m shares as of 30 June.
Shipowners' bonds
Oaktree has been selling off shipowners' bonds.
As well as its investment in Golar LNG's debt, Oaktree held convertible bonds issued by US-listed Ardmore Shipping, Eagle Bulk, SFL Corp, Scorpio Tankers and Seacor Holdings during the first three months of this year.
But the firm has since divested all its Ardmore, Eagle Bulk and Seacor bonds and had sold off most of its Scorpio Tankers notes.
Oaktree's other long-standing shipping investment — product tanker company Torm — accounts for 7.6% of its investment portfolio and was worth almost $476m at the end of the second quarter.
As Oaktree has pulled back from its investments in shipowners, it has taken a stake in Brazilian mining giant Vale.
In May, the investment firm bought 6.3m shares in the miner, a major charterer of bulk carriers, and has since sold around 100,000 of the securities.
