Hanno Tamminga believes shipping has to be sold to German retail investors for what it is — a risky investment.

His company, New Shore Invest, has launched a project to finance a series of small multipurpose (MPP) vessels under construction for German shipowner Reederei M Lauterjung.

In a bid to mark a break with the past, Tamminga is giving potential investors the whole story, warts and all.

Warts and all

That is especially important in Germany, he says, where shipping has become a dirty word among retail investors.

Tamminga adds it means saying good riddance to the worst practices of selling to retail investors during the KG (limited partnership) era, which led to stories of elderly investors losing their life savings through shipping investments.

“That approach doesn’t work anymore under a legal perspective,” Tamminga says.

He is targeting a new generation of well-educated, moderately affluent investors aged 30-plus who are ready to invest small amounts in the projects.

He notes the German KG market was a billion-dollar market that disappeared overnight.

Surveys conducted by New Shore have given rise to hopes that the retail market could be reanimated, with plenty of investors ready to take the plunge.

Reanimating the retail market is only possible if you break it down into very small tickets that open up the market, says Tamminga.

“We’re not trying to convince the people who have lost €100,000 ($112,000) shipping investments but are trying to find the ones who are ready and willing to [invest] €1,000.

We’re not trying to convince the people who have lost €100,000 ($112,000) shipping investments but are trying to find the ones who are ready and willing to [invest] €1,000

Hanno Tamminga

"And we can only do that because we’re online and digital,” he says.

New Shore will provide the digital sales and marketing channel that will again enable shipping to be offered to the masses.

New era, new deal

Unlike the KG era, in which investors bought shares in a limited partnership, New Shore's investors will acquire securities.

Under German law, up to €8m can be raised without the need to issue a prospectus, meaning costs can be half what they were in the days of the KG system.

Tamminga, who has worked with several German shipping companies and a UK shipbroker, does not expect the concept to appeal to large shipowners with access to big capital markets. Instead, the goal is to focus on the small and medium-size shipowning segment.

“We are giving them access to the small capital markets. With easy to structure, cheap, regulated products.”

The launch project with Lauterjung focuses on a small MPP vessel under construction in Poland that has a three-year charter attached.

2020 delivery

The German owner placed an order last summer at Stocznia Szczecinska shipyard for the first two vessels and is understood to have a series of options.

The first vessel, the 3,600-dwt Arion, will be delivered in 2020.

It is an enhanced version of smaller MPP designs in the Lauterjung fleet, with economic fuel consumption of 4.5 tonnes of diesel per day.

The ageing profile of vessels in the sector make the Arion an interesting project, says Tamminga.

Besides New Shore, there have been relatively few crowdfunding ventures in the German market.

Last month, Marvest said it was seeking investors to raise €350,000 ($394,000) to back the 5,800-dwt general cargoship FL Levante (built 2005).

Finance

How New Shore aims to revive Germany’s retail space