17 July 2024
Litigation Capital Management Limited
("LCM" or the
"Company")
Trading
Update for 2024 Financial Year
Litigation Capital Management Limited
(AIM:LIT), an alternative asset manager specialising
in dispute financing solutions internationally, is
pleased to provide an update on its business for the 2024 financial
year ended 30 June 2024.
We are pleased to report another successful
year with eight investments concluding in the period generating
realisations for LCM, inclusive of performance fees, totalling
AUD$56.0m. This is compared to LCM's invested capital of
AUD$23.8m, representing a multiple on invested capital (MOIC) of
2.4x. This performance aligns with our long-term track record of
an average MOIC of 2.7x from investments
concluded within the last 13 years, and underscores
the successful execution of our strategy.
Moreover, we have made a strong start to our
2025 financial year. Shortly after the 2024 financial year
end, a single case investment concluded generating realizations for
LCM of at least AUD$12.5m, including performance fees, compared to
LCM's invested capital of AUD$1.5m, representing a MOIC of
8.3x.
|
Period
|
Realisations
(AUD$m)
|
Invested
Capital (AUD$m)
|
MOIC
multiple
|
|
H1
|
28.4
|
8.8
|
3.2x
|
|
H2
|
27.6
|
15.0
|
1.8x
|
|
FY24
|
56.0
|
23.8
|
2.4x
|
|
Post Period end
|
12.5
|
1.5
|
8.3x
|
The average duration of cases concluded in FY24
was 45 months - slightly longer than our general expectation of
36-42 months, which remains unchanged. This largely reflects
the COVID related delays that we have previously communicated which
impacted several of the investments that concluded in the
period. Importantly, elongated time has not adversely
impacted on investment performance.
We continue to invest in what we believe are
the highest quality legal claims, collaborating with leading law
firms and barristers in our respective markets.
We have seen high demand for our capital in the second half
of the year and expect to report New Commitments for FY24 in excess
of AUD$250m (FY23: AUD$176m). It remains our key strategic
priority to continue to grow New Commitments, and thus ensure LCM
achieves additional financial scale.
Our current portfolio of investments, both
direct investments that are entirely funded via our own balance
sheet and those in which we are co-invested alongside our managed
external funds, continue to perform in line with our
expectations.
Patrick
Moloney, CEO of LCM, commented: "The performance of our concluded
investments in our 2024 financial year highlights the strength and
effectiveness of our investment strategy. Through our rigorous
investment process, we have assembled a high-quality portfolio of
uncorrelated legal finance assets that are positioned to deliver
attractive future aggregate investment performance. Given our
access to capital, further growing New Commitments remains our key
strategic priority and we are well on track. We see significant
upside potential here.
"We look
forward to updating our investors on our strategic progress with
our full-year results presentation on 19 September and are excited
about our future opportunities."
Below is a brief summary of selected
investments that concluded in the second half of our 2024 financial
year.
Binding Settlement
reached - Direct balance sheet Investment
A successful outcome in a dispute investment
which forms part of LCMs portfolio of 100% direct investments has
been achieved. The proceedings were heard in the Supreme Court of
Western Australia and included two levels of appeal at which LCM's
funded party was successful at each level. A binding
settlement deed has been executed by the parties resulting in the
realisation of LCM's investment. The investment is one of four
legacy disputes held at cost within our financial
statements. Details of the returns are
highlighted below:
|
AUD$m
|
Investment performance
|
|
Invested capital
|
2.8
|
|
Investment return
|
9.2
|
|
Total revenue
|
12.0
|
|
MOIC
|
4.3x
|
Binding Settlement reached -
Direct balance sheet Investment
A further successful outcome was achieved with
respect to a portfolio of insolvency claims related to the failure
of an Australian listed construction company. A binding settlement
deed was executed by the parties resulting in the realisation of
LCM's investment. The investment also forms part of LCMs portfolio
of 100% direct investments. Details of the returns are highlighted
below:
|
AUD$m
|
Investment performance
|
|
Invested capital
|
2.8
|
|
Investment return
|
7.4
|
|
Total revenue
|
10.3
|
|
MOIC
|
3.7x
|
Furthermore, below is a summary of the
investment that concluded shortly after our financial year
end.
Bilateral Investment Treaty -
Fund I Investment
LCM funded a claim advanced in respect of a
breach of a bilateral investment treaty and brought under the
International Centre For Settlement of Investment Disputes (ICSID)
Convention. The Tribunal issued an award in July 2023 in favour of
LCM's funded party for USD$76.7m plus interest and costs. The
Respondent sought to challenge the award, but the parties have now
reached a settlement in advance of the annulment hearing. The terms
of the settlement are confidential.
The claim forms part of LCM's managed Global
Alternative Returns Fund ("Fund I") and was funded directly from
LCM's balance sheet (25%) and Fund I investors (75%). Details of
the returns are highlighted below:
|
AUD$m
|
Investment
performance
|
LCM
performance metrics
|
Fund I
performance metrics
|
|
Invested capital
|
5.9
|
1.5
|
4.4
|
|
Investment return
|
23.3
|
5.8
|
17.5
|
|
Total revenue
|
29.2
|
7.3
|
21.9
|
|
MOIC on investment
|
5.0
|
5.0
|
5.0
|
|
Performance fee*
|
-
|
5.2
|
(5.2)
|
|
Gross profit
|
23.3
|
11.0
|
12.3
|
|
MOIC inclusive of performance
fees
|
5.0x
|
8.3x
|
3.8x
|
*The investment returns are subject
to change based on the prevailing FX rate and timing of
distribution
Notice of
Results
We expect to report our 2024 financial year
results on 19 September 2024.
Enquiries
|
Litigation Capital Management
|
c/o Tavistock PR
|
|
Patrick Moloney, Chief Executive
Officer
David Collins, Chief Financial
Officer
|
|
|
|
|
|
Canaccord (Nomad and Joint Broker)
|
Tel: 020 7523 8000
|
|
Bobbie Hilliam
|
|
|
|
|
|
Investec Bank plc (Joint Broker)
|
Tel: 020 7597 5970
|
|
David Anderson
|
|
|
|
|
|
Tavistock PR
|
Tel: 020 7920 3150
|
|
Tim Pearson
|
LCM@Tavistock.co.uk
|
|
Katie Hopkins
|
|
NOTES TO EDITORS
Litigation Capital Management (LCM)
is an alternative asset manager specialising in disputes financing
solutions internationally, which operates two business models. The
first is direct investments made from LCM's permanent balance sheet
capital and the second is third party fund management. Under those
two business models, LCM currently pursues three investment
strategies: Single-case funding, Portfolio funding and Acquisitions
of claims. LCM generates its revenue from both its direct
investments and also performance fees through asset
management.
LCM has an unparalleled track record
driven by disciplined project selection and robust risk
management.
Currently headquartered in Sydney,
with offices in London, Singapore, Brisbane and Melbourne, LCM
listed on AIM in December 2018, trading under the ticker
LIT.
www.lcmfinance.com
Inside
Information
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of article 7 of the Market Abuse Regulation (EU) 596/2014 as
amended by regulation 11 of the Market Abuse (Amendment) (EU Exit)
Regulations 2019/310. With the publication of this announcement,
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