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Introduction
The past five years have witnessed several remarkable investment success stories in the shipping industry, where savvy investors realized outsized returns by astutely timing market cycles and executing bold strategies. This report examines Fredriksen’s bet on Golden Ocean – the third of four high-profile reports, each exemplifying how private capital can achieve exceptional gains in shipping. A concluding report will follow the four cases to distil lessons and strategic considerations for investors evaluating opportunities in the shipping sector.:
- Oaktree Capital’s turnaround of Torm – a distressed product tanker company restructured in 2015 that went on to multiply Oaktree’s equity value fivefold.
- John Fredriksen’s stake in Frontline – the Norwegian shipping magnate’s holdings in a crude oil tanker operator yielded a 3.5× return amid a cyclical rebound.
- Fredriksen’s bet on Golden Ocean – a leading dry bulk carrier where Fredriksen’s increased investment paid off 4.6× over five years, culminating in a lucrative exit.
- The Coustas Family’s position in Danaos Corp. – a containership leasing company in which the founding family’s stake ballooned 14× in value thanks to a post-restructuring boom in container markets.
- Comparative Analysis of the Four Cases and Key Takeaways
Background
Golden Ocean Group Ltd. is a leading dry bulk shipping company, focused on large bulk carriers (Capesize and Panamax vessels) that transport iron ore, coal, grain, and other commodities. This case is another John Fredriksen-backed venture, illustrating his success beyond tankers. Dry bulk shipping is intensely cyclical, driven by global commodity demand (particularly from China and India) and the supply of ships.
After a historic collapse in 2015–2016 (when the Baltic Dry Index fell to record lows amid a supply glut), the sector slowly recovered. Golden Ocean itself underwent restructuring in 2016: Fredriksen’s Hemen Holding injected new equity when the company was near collapse, and Golden Ocean acquired vessels from distressed peers (including a 2017 acquisition of 14 ships from Quintana). By 2019, Golden Ocean had stabilized, though market rates were still modest. Fredriksen held a significant stake (and was the largest shareholder), positioning the company for eventual recovery in the bulk cycle.
Fredriksen’s Investment and Scaling
In 2019, John Fredriksen owned approximately 50.6 million shares of Golden Ocean, worth about $257 million at the time (the share price was around $5.08 on NASDAQ). Unlike the Frontline case, Fredriksen did increase his holding in Golden Ocean over the subsequent years. Through market purchases and possibly participating in equity issuances, he grew his stake to 79.1 million shares by 2024. This roughly 56% increase in shares held indicates that Hemen/Fredriksen doubled down on Golden Ocean during periods of market weakness – a classic contrarian move.
One such opportunity arose in 2020: the COVID-19 pandemic temporarily hit dry bulk demand – as global trade briefly contracted – pushing Golden Ocean’s stock to very low levels. It is likely that Fredriksen added to his position around that time when shares were cheap (Golden Ocean’s stock traded in the $2–3 range at the trough). Additionally, Golden Ocean raised equity in early 2021, as a private placement to fund vessel acquisitions, and Fredriksen almost certainly participated to maintain or increase his ownership.
By 2024, Golden Ocean’s share price had risen substantially, thanks to a strong dry bulk market in 2021 and parts of 2022. The 79.1 million shares Fredriksen owned were worth roughly $1.18 billion – at about $15 per share – by mid-2024. This represented approximately a 4.6× increase in the value of his stake compared to 2019. The larger multiple (relative to Frontline’s 3.5×) reflects both the appreciation of the stock and Fredriksen’s share count expansion (effectively investing more capital at low prices, which magnified the end result).
On a constant-share basis, Golden Ocean’s stock went from ~$5 to ~$15 (about 3×), but with the increased stake, Fredriksen’s total equity value rose 4.6×. In terms of annualized return, the value of his stake grew at roughly 35% IRR over the five-year period – a robust outcome.
| Investment Figures (Approximate, rounded) | 2019 | 2024 (Post-Boom) |
|---|---|---|
| Stake Held (Million Shares) | 50.6 | 79.1 |
| Stake Market Value | $257 million | $1.18 billion |
| Share Price (NYSE) | $5.08 | $15.00 |
| 5-year Equity Multiple | – | 4.6× increase |
| Annualized IRR | – | 36% |
Growth Catalysts and Strategy
Golden Ocean’s impressive performance and Fredriksen’s returns were driven by a confluence of market forces and strategic decisions:
Dry Bulk Market Revival: After a dismal mid-2010s, the dry bulk shipping market began recovering in late 2019 and then accelerated sharply in 2021. The key demand drivers were China’s infrastructure stimulus and industrial rebound (China accounts for the majority of global iron ore and a large share of coal imports) and commodity restocking post-pandemic.
In 2021, China’s appetite for iron ore surged to feed its steel industry, and global grain trade was robust. Simultaneously, fleet supply growth was constrained – ordering of new bulk carriers had been scant during the prior slump, and environmental regulations discouraged new builds. This imbalance led to one of the strongest upcycles in recent memory: the Baltic Dry Index (BDI), a composite gauge of bulk freight rates, soared from an average of ~1,350 in 2019 to over 3,300 at its peak in 2021 – an indicator of rates more than doubling).
Capesize vessels (Golden Ocean’s core segment) that had struggled to earn $10,000/day in 2016 were fetching in excess of $40,000/day at times in 2021. Golden Ocean’s financial results reflected this boom – for instance, in Q4 2021, the company posted a record $203.8 million net profit (around $1.02 EPS for that quarter alone), a dramatic turnaround from near-breakeven levels a couple of years prior. Such earnings translated into rapid deleveraging and generous dividends. Golden Ocean paid out sizable dividends throughout 2021–2022, distributing cash to shareholders including Fredriksen. In short, timing the cycle was crucial: Fredriksen’s increased stake meant he had more exposure exactly when the bulk market surged, amplifying his gains.
Fleet Renewal and Expansion: Golden Ocean pursued an aggressive yet savvy fleet strategy under Fredriksen’s stewardship. During the down years, the company scrapped or sold older vessels to reduce operating costs, and concurrently, it invested in modern tonnage.
Notably, Golden Ocean ordered several new “eco” design Kamsarmax and Capesize bulkers in the late 2010s, often at distressed shipyard prices, and installed emission-reducing scrubbers on many of its ships ahead of the IMO 2020 fuel rules. These moves paid off: the modern ships commanded premium rates and lower fuel costs, improving profitability when markets rose. Additionally, in 2021, sensing an opportunity in still-firm asset values, Golden Ocean expanded via acquisition: it acquired 18 bulk carriers (a mix of Ultramax and Kamsarmax vessels) from affiliates of Toro and Hemen, partly financed by a $338 million equity raise.
This deal which Fredriksen’s entities participated in, increased Golden Ocean’s fleet size by about 20% and solidified its position as one of the largest U.S.-listed dry bulk owners. By having a larger, younger fleet when charter rates spiked, Golden Ocean maximized revenue and earnings in the boom. Fredriksen’s willingness to inject new equity for fleet growth (when justified by low asset prices) illustrates a core strategy: scale up at the bottom to ride the wave up. The end result was a fleet with an average age lower than many competitors and higher operating leverage during the peak – directly benefiting shareholders.
Market Savvy and Risk Management: Fredriksen’s approach with Golden Ocean also showed adept risk timing. In contrast to Frontline – where he is still holding – with Golden Ocean there was a clear exit strategy as valuations became rich. By late 2022, the dry bulk market had moderated (BDI came down as China’s economy cooled and global inflation tempered demand), and Golden Ocean’s stock, while still much higher than in 2019, had pulled back from peak.
Recognizing the cyclical nature, Fredriksen took the opportunity in early 2025 to monetize his investment. He agreed to sell Hemen Holding’s entire 40.8% stake in Golden Ocean to CMB.TECH (a strategic shipping investor controlled by the Saverys family) for approximately $1.2 billion in cash. This deal, announced in March 2025, valued Golden Ocean at $14.49 per share – a hefty 44% premium to the prevailing market price and about 1.3× the company’s net asset value. The transaction effectively locked in Fredriksen’s 4.6× gain and provided a full exit at an attractive price. This move highlights Fredriksen’s keen sense of cycle peak values – by selling to a long-term strategic buyer at a premium, he ensured that paper gains became realized gains, avoiding the risk of riding the cycle back down.
From 2019 through the exit, the Golden Ocean investment delivered not only capital appreciation but also continuous dividends; coupled with the final sale, the total ROI was even higher when considering cash yields.
Outcome
Golden Ocean’s case stands as a textbook example of contrarian investing in shipping. Fredriksen’s initial and subsequent investments – when others were pessimistic – positioned him to reap outsized rewards when the tide turned.
The company itself emerged stronger: it improved its balance sheet (its debt was greatly reduced by 2022 thanks to profits) and rewarded shareholders, as cumulative dividends per share over 2021–2022 exceeded $1.50). By the time of Fredriksen’s sale in 2025, Golden Ocean was financially robust and had a “modern dry bulk fleet” that the buyer found attractive for long-term prospects.
From a performance standpoint, a 4.6× equity multiple over five years (mid-2019 to early-2024 valuations) underscores the potent combination of cycle alpha and strategic intervention. It’s worth noting that dry bulk shipping’s volatility is extremely high – had the timing been off, e.g., if the upturn was delayed or if China’s demand faltered earlier, the outcome could have been less stellar.
Fredriksen’s experience allowed him to judge that downside risk was limited by 2019 and that any positive demand shock would disproportionately benefit Golden Ocean. This asymmetric risk-reward profile is what attracted him to double down, and it indeed materialized favourably.
Strategic Insights
For investors, Golden Ocean’s story yields several lessons:
(1) Sector Diversification – even within shipping, Fredriksen spread bets across tankers and bulkers, showing that diversification can multiply opportunities for big wins – in this case both segments experienced upcycles. Private equity firms might similarly invest in different but related sectors (e.g., bulk, tankers, containers) to increase the odds of hitting a cycle right.
(2) Active Participation – Fredriksen didn’t just hold stock; he actively recapitalized and grew the company during adversity. This echoes an investor mindset of backing a platform investment and scaling it, rather than just a passive hold.
(3) Timely Exit – Knowing when to exit is as important as when to enter. By selling to CMB.TECH at a premium, Fredriksen avoided complacency with paper gains. PE investors typically have defined exit timelines; in cyclical plays, being disciplined about exiting near target valuations or when strategic interest is high can lock in returns before the cycle potentially turns.
(4) Value of Dividends – Golden Ocean paid substantial dividends at the peak of the cycle, which is cash return to investors. In evaluating returns, one should include these distributions. For PE funds, this is analogous to taking interim payouts (recapitalizations or partial secondaries) when portfolio companies have excess cash, de-risking the investment while still retaining upside. Finally,
(5) Macro insight – understanding macro drivers such as China’s commodity demand, fleet supply trends, etc., was key. Thorough research and expert insight into these variables can inform the timing of entry/exit in shipping investments. In summary, Fredriksen’s Golden Ocean bet demonstrates that bold capital commitments in a downcycle, combined with tactical fleet management and timely harvest of gains, can yield near fivefold returns, reinforcing the notion that fortune favours the bold (and informed) in shipping.
Key Findings On All Four Investment Cases
The stellar outcomes from the featured shipping investments showcase what is possible in this volatile sector – five-year IRRs up to ~70% and multiples over 10× are virtually unheard of in most industries, yet were achieved here. Private markets investors can indeed reap such rewards, but the journey requires a solid stomach, deep insight, and sometimes a bit of luck with external events.
Shipping should be approached as a special situations play: it’s not a fit for every portfolio, but under the right circumstances, it can dramatically boost returns. The lessons in these four cases boil down to a few guiding principles: buy low, fix what’s broken, ride the wave, and sell high. Those are easy to say, harder to do – but as the Oaktrees and Fredriksens show, when executed well, the payoff is well worth it.
For private equity professionals evaluating shipping, the implication is not to shun the sector’s volatility, but to harness it. With disciplined strategy and timing, shipping investments can complement private market portfolios by providing uncorrelated, large-scale gains that few other industries can match.
The key is respecting the unique dynamics of maritime markets – treating cycles as king, managing risk fiercely, and being ready to both seize opportunities and exit decisively. If done right, the result can be transformational, turning distressed ships into treasure troves and vindicating the bold contrarian investor. In the cyclical seas of shipping, fortune favours the prepared – and as these great investment stories illustrate, the rewards for preparedness and courage can be truly spectacular.
We invite you to join us again in our next installment, “4. The Coustas Family’s position in Danaos Corp.“, as we continue to explore the topic and provide further insights into this area of study.
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