Yieldstreet hires DVB veteran to launch ship finance hub in Athens
by George Cambanis | MANAGING DIRECTOR OF MARINE FINANCE
by JOE BRADY
A crowdsourced investment platform has doubled down on its presence in ship finance by hiring a long-serving DVB banker to lead its new operations in Greece.
New York-based YieldStreet has recruited Stefanos Fragos as senior credit officer of marine finance to help establish a ship lending hub in Athens.
Fragos told TradeWinds this week that he will head the lender’s credit and structuring functions, working with managing director George Cambanis, who is responsible for global loan origination.
Both men come from traditional credit backgrounds. Fragos spent 16 years at DVB, where he was responsible for $800m-worth of shipping transactions, while Cambanis founded Deloitte’s practice in Greece in 1976.
“A lot of technology goes into the crowdfunding principle and that is highly interesting to me,” Fragos said of his attraction to the alternative-lending vehicle after years in traditional finance.
“That tech in lending is the new model. It doesn’t mean traditional bank financing will be out of business — not at all. But opening it up to a wider audience is a good thing for both shipowners and investors.
“Access to asset-backed investing previously has been unavailable to the ordinary person. Their only choices were through equities. Now a doctor or a lawyer with $10,000 to invest can become part of a lending and have downside protection.”
Fragos said he was also attracted by YieldStreet’s decision to locate in Athens.
“I was happy to be given the opportunity to lead this effort from Athens, the major shipping hub of the world, and to put my name to that success,” he said.
YieldStreet has about $100m in exposure to date covering 10 ships — mostly bulkers with a few tankers, Fragos said. It has a further $40m in deals in the pipeline.
The lender has a “sweet spot” for individual deals of $10m to $30m and continues to favour bulkers and tankers, with both “vanilla” senior loans and sale and leaseback deals in the mix, he said.
Many vessels have been placed on charters of four to six months, but can also trade spot, he added.
Borrowers can expect to pay between 9% and 11% in interest — which although high compared with traditional bank lending is fairly typical for alternative capital.
“We don’t want to engage in very long tenors — usually three or four years,” Fragos said.
“We feel that we’re in a decent point in the cycle for both bulkers and tankers with some flexibility, without wanting to worry about seven or eight years where it could be in a different place.”
YieldStreet has also financed cash buyers of vessels destined for scrapping, Fragos said, but those numbers are not reflected in the vessel or dollar totals cited for its shipping activity.
Overall, YieldStreet recently hit a milestone of $500m invested across industries, which include real estate, litigation finance and alternative sectors.
While YieldStreet is currently enthusiastic about shipping finance, its ability to lend across those sectors allows it to divert resources from a disfavoured sector to a more attractive one when necessary, Fragos said.
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