A Relook at Singapore Shipping Trusts

May 2006 marked an important milestone in Singapore’s quest to become a major international maritime centre when Pacific Shipping Trust (“PST”) made its debut on the Singapore Exchange. Touted as the republic’s answer to Germany’s KG funds and Norway’s KS funds, the shipping trust model offered shipping companies an alternative ship financing solution for their fleet expansion plans and also provided investors with a new asset class for those seeking shipping exposure. First Ship Lease Trust (“FSL Trust”) and Rickmers Maritime joined the fray the following year and plenty of excitement was injected into the sector. But over four years have passed and the euphoria has since worn off as all three shipping trusts faced specific challenges brought by the unprecedented simultaneous collapse of the financial and shipping markets. As the dust settles, is the shipping trust model still relevant today and have the investors lost interest in this investment class?

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