Cleaves’ new shipping hedge fund is building a long position in dry bulk. It increased its exposure — currently 52% — during the dip, according to a report by the fund, which is led by Joakim Hannisdahl, a former head of equity research. The rest is held in cash.

The Oslo-based fund, which launched in October last year, gained 3% in January versus the previous month, and is up a further 2.3% so far in February. “We are optimistic towards dry bulk shipping,” it said, with a seasonal shift expected after the Chinese New Year and the Beijing Olympics. “Although our forecast is for dry bulk earnings to average around the same level as 2021, we believe this is not reflected in the current pricing of the shares,” which are at a 25% discount to net asset value. Besides that, with the enterprise multiple at 2.8 for this year, “we see significant upside ahead.”

While the fund divested its liquefied natural gas and liquefied petroleum gas shipping positions before the market fell in the middle of last month, it is looking for re-entry opportunities in the very large gas carrier segment ahead of what is expected to be “better fortunes” in the second and third quarters of this year.

It is also monitoring a re-entry point in the oil tankers sector, which it dropped in December. Although the outlook is “bright” from the fourth quarter of this year, it “appears unattractive taking a bet on the segment at all-time-low earnings and amidst one of the worst reporting seasons on record,” it said.

The fund has yet to take a position on car carriers and containers.

Meanwhile, its Irish structure to attract international investors should be ready in April.