Ship-investment funds sailing high; Korea Marine to launch its.

(From The Korea Herald)

By Kim Ji-ho Korea is the world's No. 1 shipbuilder and fifth-largest container- freight handler. Still, there's one corner missing from a powerful triangle that could greatly enhance Korea's presence in the sizzling global marine transport industry - ship ownership.

Filling in the missing piece, Korea Marine Fund Corp. is touting ship investment funds, the first in Asia. With its first fund, unveiled in March, very popular with investors, the company is set to release its second one today.

The investment fund combines with bank loans to be used for purchasing a new or used vessel, which is leased to shipping lines. Most of the profit is returned to the lenders and investors through dividends.

Linking capital markets to shipyards and shippers, the system can funnel a huge amount of excess liquidity here, which is hopping from one investment vehicle to another amid record-low interest rates, into industrial fronts.

"There's a mountain of benefits, the biggest of which is that now Korean investors can take profits that would have gone to foreign shipowners without such an instrument," says Yeonsin Kim, chief executive of Korea Marine Fund.

Roh's initiative Before the 1997-98 currency crisis, Korean shipping companies had big fleets, with banks willing to cover up to 90 percent of ship purchase prices. The crisis, which forced Korea to seek an International Monetary Fund bailout, sank the system.