12-09-2022 Low Fidelity: Is giant US investor calling time on faith in dry bulk? By Joe Brady, TradeWinds
Major US institutional player Fidelity Investments has slashed its holding in New York-listed Genco Shipping & Trading and Star Bulk Carriers in what could signal reduced enthusiasm for the future of the dry bulk sector. The Boston-based investor now holds 1.2m shares, or 2.8%, in Genco, according to a securities filing. That is well down from a peak of 6.3m, or just under 15%, reached in February. That apex had made Fidelity the largest holder in John Wobensmith-led Genco when combined with the gradual sell-down by core private equity backer Centerbridge Partners.
Fidelity built its position in both Genco and the dry sector throughout 2021 during a period of record earnings for the trade. But filings with US securities regulators show that the positions have been in retreat following the first quarter of 2022. Fidelity made its first major reduction in Manhattan-based Genco in May 2022 — about the peak of the recent dry bulk bull run. It was down to 3.9m shares or a 9.3% stake as of a filing 10 May. Then on 29 June, Fidelity cut the holding to 2.5m shares or a 5.9% stake. That reduction placed Fidelity behind both Centerbridge 4.6m shares, or a 10.8% stake, and Blackrock with 3m shares, or 7.1%.
Fidelity’s other major dry bulk holding has been Greece-based Star Bulk, the largest shipowner in the sector with a fleet of 128. TradeWinds reported in August 2021 that the giant long-long investor had accumulated a 10% position in Star with shares worth over $200m at the time. That holding fell to 6.1m shares or just over 6% with a filing in February 2022. Petros Pappas-led Star has not updated the Fidelity holding in its own filings, but Fidelity’s last reported position was 1.5m shares or 1.5% on 30 March, according to Yahoo Finance.
Shares of Genco were trading around $14.30 on Monday, down about 11% year to date after reaching a high near $27 in June.
Star Bulk was trading near $20.75, down about 8.4% on the year after reaching a trading high of just under $34 in May.
Both companies’ fleets include capesize bulkers, which have been hit hardest by the slump in freight rates in recent months.