May 18, 2016 Leave a comment
Five years ago, ship brokers were introduced to a scary new phrase, which was to forever disrupt the cozy and somewhat Delphic world of desktop ship valuations. That phrase was “quantitative analyst1”, which first appeared in a Tradewinds article describing the launch of the mapping, ship search and valuation provider, VesselsValue in May 2011. Today, most shipping people are familiar with work of “quants”, and their role in the examination of big data to produce meaningful and useful information, but five years ago, the launch of VesselsValue was nothing short of a revolution.
Behind that revolution was years of hard work. Indeed, the origins can be traced back to 1976, when VesselsValue CEO, Richard Rivlin, joined Clarksons as a trainee ship broker and helped set up a computer system for the Sale and Purchase department. Innovation is a theme throughout Richard’s career. He was a founding member of Braemar Shipbroking in 1983. In 1993, he formed Seasure Shipbroking and it was then that the outline for VesselsValue began to take shape.
The catalyst was the 2008 financial crisis, when a slump in ship sales forced ship brokers to declare that with no “last done” ship sale, the market was illiquid, and therefore ship values could no longer be given.
“This was exactly the time when banks required values,” says Richard. “It was then I decided to activate my plan for VesselsValue.” Together with his brother, Christopher, a professor of mathematics, they built the first version of VesselsValue in Excel. However, the complex multi-regression analysis needed a new approach. Ben Durber and BB Solutions were brought in to develop the model and the website, which went live on Friday 13th May 2011.
Looking back on the last five years, Richard feels the hardest part was building the ship database. “The database had to be in a particular format and structure to ensure high-speed access. We decided to build our own database, which is why we built up a large team of researchers and analysts,” he said.
Ship finance providers, with their familiarity with the role of “quants” and regression models were the first to subscribe to VesselsValue. For them it ticked the boxes of transparency and accuracy. The methodology also satisfied the rigorous requirements of the risk analysis and compliance departments.
The shipping industry was a bit slower to recognize the ascendancy of VesselsValue, but in September 2012, VesselsValue was awarded “Highly Commended” at the Lloyd’s List Global Awards for Business Innovation. Since then VesselsValue has continued to grow and add new features:
- Friday 13th May 2011: VesselsValue goes live
- October 2012: Daily historical values added back to 2007
- November 2012: VV+ search tool added
- February 2013: LNG and LPG added
- November 2013: Small tankers added
- September 2014: Isle of Wight office opened, led by Simon Hastain
- May 2015: One million valuations!
- June 2015: London team says goodbye Chiswick, hello Hammersmith
- June 2015: Discounted Cash Flow (DCF) added to VV$ module
- July 2015: Adrian Economakis and Georgina Gavin ring the Nasdaq closing bell during MarineMoney week
- September 2015: VV opens SE Asia representative office in Singapore
- May 2016: The launch of VV Offshore
The shipping banks have been the driving force behind demands for the valuation of offshore vessels. This sector is currently going through its worst slump in living memory, and the launch of VV Offshore is timely, and mirrors the launch of the original modules of VesselsValue.
Looking ahead, Richard sees the continuing growth of transparency of shipping information for all in the industry. “In shipping, the increasing automation of services will be applied to processes and business sectors, which many previously thought to be impossible to automate,” says Richard.
The VesselsValue state of play in May 2016:
- Four offices (Isle of Wight, London, Singapore, Stoke)
- 66 employees and growing fast
- Cargo Shipping, Offshore, and other departments established
- 20 languages spoken across the company
- 300 current clients including the world’s leading banks, funds, ship owners, and others
- 2,260 total mentions in the press, across 37 countries, ranging from Greece to Fiji
- Richard Rivlins’s 40th year in shipping!
We’ll leave you with one final thought…
- The largest taxi operation in the world owns no cars – Uber
- The largest property rental company in the world owns no property – Airbnb
- The largest music distribution company in the world owns no music – Spotify
- The largest shipping valuation company in the world owns no ships – VesselsValue
Notes: 1 According to a search of the Tradewinds archive, the phrase “quantitative analyst” was first used in May 2011, in an interview with Alex Adamou, the quantitative analyst at VesselsValue.