Stockholm (HedgeNordic) – After a difficult second half of 2024, weighed down by geopolitical tensions, weak Chinese demand, and energy sector volatility, shipping equities staged a strong recovery in early 2025. January’s rebound was fueled by a wave of sanctions, tariffs, and policy moves from U.S. President Donald Trump, driving a rally that benefited the two Nordic shipping-focused equity hedge funds. Cleaves Shipping Fund gained 5.4 percent, while Joakim Hannisdahl’s Gersemi Shipping Fund posted its strongest month on record, returning 9.3 percent to become the top performer in the Nordic hedge fund universe in January.
“Shipping equity markets performed well in January, followed by a mix of sanctions, tariffs and astounding announcements from President Trump. The rally started by the Port of Shandong implemented a ban on ships subject to U.S. sanctions,” explains Carl-Sigurd Synvis, Head of Fund Management at Cleaves Asset Management. “Similarly, India announced that it will refuse entry to U.S.-sanctioned oil tankers carrying Russian cargo, with an exception for vessels chartered before January 10, as long as they complete unloading by March 12,” he continues. This was followed by the U.S. expanding its sanctions to nearly 160 oil tankers involved in Russian oil trade. As a result, nearly 10 percent of the global tanker fleet is now listed by OFAC (Office of Foreign Assets Control), with 35 percent of the 669-vessel “dark fleet” transporting Russian, Venezuelan, and Iranian oil under sanctions from the U.S., UK, or EU.
“Shipping equity markets performed well in January, followed by a mix of sanctions, tariffs and astounding announcements from President Trump.”
Carl-Sigurd Synvis, Head of Fund Management at Cleaves Asset Management.
Carl-Sigurd Synvis, portfolio manager of Cleaves Shipping Fund, elaborates that the impact of sanctions suggests a 1 million barrels per day (mb/d) increase in OPEC production – primarily from Saudi Arabia – could drive demand for an additional 20 Very Large Crude Carriers (VLCCs), equivalent to roughly 3.5 percent of the global fleet under 20 years old. Similarly, a 1 mb/d rise in exports from the Americas (U.S. and Brazil) could create demand for around 40 VLCCs, representing approximately 5-6 percent of vessels in this age category. “Having increased our VLCC exposure during the fourth quarter of 2024, we benefited from the strong performance of VLCC stocks in January,” Synvis explains, attributing the fund’s 5.4 percent gain for the month to this positioning.
Following the sell-off in shipping and energy in the second half of 2024, Cleaves Shipping Fund has adopted a cautious stance entering the new year. Synvis explains that the shipping and energy sectors remain highly vulnerable to trade wars and geopolitical tensions, which are increasingly difficult to predict under President Trump’s administration. As a result, the fund has maintained a strong emphasis on sector selection and stock picking, navigating a market that continues to lack clear direction.
