Creative Commons

Shipping market as an international industrial sector is responsible for the 90% of the world’s trade. This multiethnic industry is responsible for the trade transactions of import and export of food industry, manufactured goods, raw and liquid materials. This activity of trading by the sea is called seaborne and it could be fluctuated by the developments in world shipping, such as the fleets capacity, cargo carried and routes, as also technological innovation in ships. Seaborne trade and shipping market continue to expand, distributing benefits for consumers around the world and for competitive freight costs, as shipping transportation has a continuously growing efficiency and even an increased economic growth. It can be considered that there are over 50.000 commercial trade ships operating internationally, transporting every kind of cargo. The world fleet is registered in over 150 nations and managed by over a million employees with vary nationality. The shipping industry can be easily understood by the developments in world shipping, such as the fleets capacity, cargo carried and routes, as also technological innovation in vessels. Vessels are technically sophisticated, high value assets that can cost over 200 USD million to build and the operation of these vessels generates an estimated annual income of over half a trillion US Dollars in freight rates. Among the past decades there are also great changes in the shipping markets by focusing on the division of liner and tramp shipping. Between the greatest countries that the top of the shipowners came from, Japan, Great Britain, Norway and Greek, can be found extremely common financial strategies and organization of capital structure. In the latest years and after the economic crisis, it has been observed that lot of shipping companies choose to raise capital for investment and finance decisions through their equity. Equity can be increased and allocate assets for investment mostly when private equity funds choose to be involved as the shipping market is an area with various applications and strategies. The private equity market, is a significant cornerstone for the new trends of modern economy and there are a lot to discuss. Comparing the private equity funds with the shipping industry and the whole market can drive us to significant results. Shipping market was ready to encounter lack of capital and the private equity funding turned to be an attractive subsidiary option. In this research we will analyze how the private equity sector involved in the financing of the shipping firms as an alternative source, how private equity financing changes the balance of financing in shipping industry.