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Last checked at 
19 Jul 2021 07:00
19 July 2021
Litigation Capital Management Limited
("LCM" or "the Company")
Market Update
Litigation Capital Management Limited (AIM:LIT), a leading international alternate asset manager of disputes financing solutions, is pleased to provide a market update for the year ended 30 June 2021 (FY21).
· | LCM's 10 year track record remains robust with 10 year portfolio ROIC as at 30 June 2021 of 153% and cumulative portfolio IRR of 78% |
· | The Global Alternative Returns Fund (GAR) is currently 76% committed achieved in 15 months, versus an investment target period of 24 months. Overall capital commitment of US$115m of US$150m. The second fund is progressing well with a close targeted for Q3 of this calendar year |
· | Applications increased 10%, with 572 applications received during FY21 |
· | Conversion into active investments was also consistent at 3%, with an increase in high profile quality investments requiring increased resource allocation. This conversion rate demonstrates LCM's discipline and consistency in applying its rigorous due diligence in investment selection |
· | Whilst all other scale metrics showed an increase on the year prior, the level of commitments was down due to our due diligence and investment selection taking longer due to COVID. This increased due diligence time recognises a general slow-down in all sectors of legal services consequent upon COVID |
· | Total portfolio capital commitment of $181m comprises $105m of Direct investments alongside a further $76m of Fund co-investment maintaining a diverse portfolio of investments |
Patrick Moloney, CEO of LCM, commented: "LCM and our team have performed very well in what has been a tough and disrupted year. The GAR Fund is now over 75% committed, and we are making significant progress on the second fund with strong support from both existing and new investors. Notwithstanding some disruption to global justice systems, LCM's portfolio of disputes continues to mature.
"We are pleased to have achieved a significant resolution of an investment close to the end of the financial year which has generated strong revenue and exceptional performance metrics.
"We look forward to the coming year with optimism and an expectation that global economic conditions will be very conducive to growth.
Direct Investment
LCM's direct investments fall into two categories:
· Direct Balance sheet investments 100% funded by LCM; and
· Co-Investment funding alongside the Fund
LCM manages a direct investments portfolio with a capital commitment of $105m, which now comprises 30 separate investments including 8 investments in our acquisition strategy. Our Corporate Portfolios continue to achieve resolutions with consistent metrics.
Our portfolio of direct investments is progressing as anticipated, with our most recently announced resolution achieving an IRR of 121% and a ROIC of 313%.
Asset Management
LCM has now committed 76% of the US$150m Fund across 22 projects while maintaining diversity across commercial litigation, insolvency disputes, class actions and arbitration.
All investors in Fund I have expressed a strong interest to participate in Fund II which is targeted at a size of US$300m. This demonstrates the strength of the relationships developed since launching Fund I in March 2020.
Application conversions were marginally lower at 3% as the restrictions imposed in response to the COVID pandemic continued across the globe. This expected lowering in conversion reflects LCM's rigorous due diligence adapting to market conditions particularly in the area of recovery. Despite the challenges faced and the limited client interaction, LCM added a number of high quality and high profile investments to its portfolio during the period. Notwithstanding these challenges, LCM maintained its rigorous investment selection process, ensuring the future performance of our portfolio is preserved and delivers in line with our track record.
Strategic Alliances
LCM's Strategic Alliances continue to generate applications and, as restrictions in the UK start to lift, we expect to see this increase as we resume business meetings and develop the investment selection process with the teams we work with.
The accompanying market update presentation is available on LCM's website:
https://www.lcmfinance.com/shareholders/investor-presentations-results/
Enquiries
Litigation Capital Management | c/o Alma PR |
Patrick Moloney, Chief Executive Officer |
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Canaccord (Nomad and Joint Broker) | Tel: 020 7523 8000 |
Bobbie Hilliam |
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Investec Bank plc (Joint Broker) | Tel: 020 7597 5970 |
David Anderson |
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Alma PR | Tel: 020 3405 0205 |
Justine James Susie Hudson Kieran Breheny Molly Gretton | LCM@almapr.co.uk |
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NOTES TO EDITORS
Litigation Capital Management (LCM) is a global provider of disputes finance. LCM provides capital and risk manager services into the disputes market including insolvency, commercial disputes, arbitral disputes, class actions and corporate portfolios. LCM operates two distinct business models: direct balance sheet investments and asset management. Under those business models, LCM pursues three investment strategies: single-case funding, corporate portfolio funding and the acquisition of claims.
LCM has an unparalleled track record, driven by effective project selection, active project management and robust risk management.
Current 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
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