Commodity HQ Profile: John Fredriksen

John Fredriksen is a self-made billionaire who built his financial empire as a shipping magnate, primarily in the business of transporting oil, then continued his success in offshore oil drilling. Fredriksen is currently ranked number 75 on Forbes’ list of billionaires, and listed at 68 on Bloomberg’s list of the 200 richest people. His net worth is currently estimated at $13.3 billion as per Bloomberg’s figures. Britain’s Sunday Times lists him as the ninth richest person residing in the country, where they estimate his wealth at £6.6 billion [for more commodity news and analysis subscribe to our free newsletter].

Early Career

Fredriksen got his start in the shipping industry at a young age as a courier with a shipbroker in the Oslo, Norway area, later going on to work for himself. Fredriksen left his home in Norway in the 1960s to pursue a career in trading, working in New York, Athens and Singapore. Fredriksen purchased his first freighter in 1973 for $700,000. However, this investment proved to be non-profitable when the freighter broke down in the Caribbean soon after he bought it.

John Fredriksen’s wealth grew through the early 1980s when he started trading oil out of Beirut. During the Iran-Iraq war, Fredriksen famously moved crude oil out of Iran, leading to a number of his tankers becoming targets for Iraqi missiles.

Modern-Day Career

Fredriksen went on to build the world’s largest fleet of oil tankers, operated through his publicly traded company, Frontline. Frontline is listed on the New York Stock Exchange (FRO), London Stock Exchange (FRO) and Oslo Stock Exchange (FRO). Recent years have seen Frontline face some financial struggles. However, Fredriksen announced in late 2011 that he would personally bail out Frontline, later breaking the company into two separate entities: Frontline and Frontline 2012. Frontline 2012 holds many of the former Frontline’s newest ships, and much of the old entity’s debt as well [see also The Ten Commandments of Commodity Investing].

Fredriksen is also Chairman, President and Director of Golar LNG, a company that started in 2001. Golar is another publicly traded company that’s listed on the Nasdaq (GLNG). The company also specializes in ship transport.

Fredriksen’s most recent financial successes come primarily from SeaDrill, a very successful offshore deep-water drilling company that he founded in 2005. Fredriksen continues to lead this company today with its headquarters located in Bermuda and operations extending into 15 countries. SeaDrill’s profits continue to rise as its reputation for safe and cost-effective drilling holds true. The company is listed on the New York Stock Exchange (SDRL), and the Oslo Stock Exchange (SDRL). SeaDrill recently sold off its Asian unit to free up cash to expand into other deep-water drilling operations. The deal was worth approximately 2.9 billion dollars, including a combination of cash, capital expenditures and shares.

Despite the cyclical nature of the shipping industry, John Fredriksen’s fortune continues to grow. He has made many wise investment decisions; having saved money when the industry was booming, he now has the ability to safely navigate his companies through the downtimes faced in recent years. His investments come from a combination of transport (primarily oil, though also of minerals, grains and fish), and from his drilling operations. John Fredriksen has involvement in a diverse group of other companies, including Deep Sea Supply, Fred Olsen Production, Marine Harvest and Golden Ocean, among numerous others. Roughly half of the companies Fredriksen is involved in are publicly traded.

John Fredriksen has maintained the confidence of his outside investors for several reasons. First, his companies typically pay off large dividends when times are good and the money is rolling in. Secondly, Fredriksen has become known for his uncanny ability to identify the exact moments when it is best to enter or exit a market, often having his investment decisions followed by others. Fredriksen maintains that sharing with investors and treating them fairly is key. He operates his businesses on the premise that if he gets paid, so do the investors [see also How To Lose Money Investing In Commodities].

Future Growth

John Fredriksen continues to invest in new companies, such as the newly formed Archer Ltd., which is an organization that specializes in oil drilling, both on and offshore.

Fredriksen’s more recent investments tend to surround the dropping prices of drilling rigs and shipping vessels that have come as a result of the recent economic decline. The prices of shipping vessels coming out of China and South Korea are currently sitting at about half of what they were at in 2007. Fredriksen stated in an interview with Bloomberg that he sees himself as a trader.

Personal Life

John Fredriksen was born in 1944 and is currently 68 years old. Fredriksen lives primarily in Britain, but also owns homes in Cyprus, Norway (where he was born) and Marbella. Fredriksen is a citizen of Cyprus.

John Fredriksen’s wife passed away in 2006, leaving him as a widower. Fredriksen has two daughters named Cecilie and Kathrine, both of whom sit on the boards for Frontline, SeaDrill and Golar. They are both heirs to their father’s financial empire.

John Fredriksen’s commitment to hard work has been attributed to his financial success, though he is also known to have a very competitive nature. He does not frequently give interviews or interact with the media. He is often considered “old-fashioned” in many respects and he does not use computers, preferring paper files to electronic [see also 5 Legendary Commodity Investors].

Nicknamed “The Viking King,” Fredriksen’s transport ships have played a big part in the expansion of his wealth. Fredriksen once declared that the shipping industry was the strongest it had been since the time of the Vikings, a statement that contributed to his earning of the nickname. Fredriksen has also been given the nickname “Big Wolf” due to his dominance in business and his involvement in rather bold business moves.

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Disclosure: No positions at time of writing.

About Janet Fowler

Janet Fowler is a graduate of the University of Alberta’s Business Education program. In the time since graduating, Janet’s career has developed in a variety of areas, particularly in the area of publishing, but also in teaching, human resources and recruiting. Janet learned at a young age that real estate could be a valuable tool in building a financial empire, having bought her first house on her own at the age of 24. In addition to Janet’s work experiences, she has developed a deeper understanding of people, finances and life in general through her world travels, which have allowed her the opportunity to travel extensively through North America, Europe, and the South Pacific. Janet’s stay in the South Pacific also provided Janet the opportunity to work for the Australian government, assisting her to develop a more global view of the working world. Additionally, Janet is a devout yogi and a movie enthusiast with a passion for all things Star Wars.
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Commodity HQ is not an investment advisor, and any content published by Commodity HQ does not constitute individual investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities or investment assets. Read the full disclaimer here.

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