PRIVATE equity firms may prove an additional financing source for shipping amid forecasts that the funding shortage within the industry will hit US$30 billion over the next three years as banks hold back on lending, reports Bloomberg.

    Banks aren't lending to owners controlling less than 10 vessels that are more than 10 years old, said Alan McCarthy, a consultant at Athens-based Eurofin.

    Paul Packard, head of maritime industries at Bank of Ireland, said at a London conference that banks have about $50 billion a year to lend, while shipping companies need $60 billion.

    Peter Shaerf, a managing director at AMA Capital Partners, which runs shipping funds and advises on debt and equity, said shipowners have been over to New York to talk to private investors.

    "There's a sense in the coming six to nine months it's time to buy assets," Mr Shaerf was quoted as saying. "We are seeing a lot of people now more than just circling the wagons, they're loading up their arrows."

    Vessel prices will collapse within a year or two, according to John Fredriksen, the billionaire chairman of Frontline Ltd, the world's biggest super tanker operator. He plans to "buy up what's there" once that happens.

    US private equity firms invested a total of $3 billion in the industry in 2009 and 2010, seeking returns in excess of 20 per cent, according to Mr Shaerf, who is also chairman of the New York Maritime Association.

(Resource:http://www.shippingonline.cn/)