Last checked at 27 Jul 2023 07:00
27 July 2023
Litigation Capital Management Limited
("LCM" or the "Company")
Update following Supreme Court ruling
Litigation Capital Management Limited (AIM:LIT), a leading alternative asset manager specialising in disputes financing solutions internationally, provides clarity following yesterday's UK Supreme Court Ruling in relation to PACCAR Inc & Ors v Competition Appeal Tribunal & Ors, Case ID: 2021/0078.
The decision will have very limited or no impact on LCM's portfolios of dispute investments in terms of future value. The Company had no involvement or funding obligation in relation to the matter referred to.
As a management team, fully endorsed by the Board, we continually focus on portfolio diversification. The Company believes that this decision will have a potential positive impact on our future market share, given the lack of diversity in a number of our key competitors.
The decision has the potential to impact litigation funding arrangements entered into within the United Kingdom only to the extent that the funders interest or return is solely calculated as a percentage of the Courts award in favour of the funded party.
As investors are aware, LCM structures its funding contracts so that its return is calculated as a rising multiple of invested capital over time. This has been a deliberate decision and those arrangements are unaffected by today's judgement. Therefore, LCM's existing investments and its business model moving forward is not adversely affected by the decision. This has been a focus of management discussions for an extended time and this ruling underlines the importance of this planning. The decision neither came as a surprise nor does it pose a risk to LCM's current investments or its business model. As stated above, we welcome this as a potential positive differentiator.
We have emphasised to investors for many years that we actively manage the construction of our portfolios of dispute investments across industry sector, dispute type, geography and jurisdiction. We also ensure that our portfolios of dispute investments is not adversely effected by concentration risk through size and capital commitment. Such discipline and diligence ensures that neither our existing investments nor our business model is at risk as a consequence of a single decision of a Court in a specific jurisdiction.
Patrick Moloney, Chief Executive Officer, commented: "Management and the Board continually address developments in the market which might pose a risk to the business and identify and implement any mitigation required to ensure we are well positioned as the market develops and matures.
"We were fully across the risks posed by the pending decision and are confident it will not adversely impact the returns across our portfolios of investments or our business model in the United Kingdom. As per our latest RNS announcements, our underlying investments have performed strongly over the past 12 months, and the pivot to a funds management business model is already showing the benefits of leveraged returns.
"As the CEO, I am looking forward to discussing our performance in detail when we release our full year results."
Enquiries
Litigation Capital Management | c/o Tavistock PR |
Patrick Moloney, Chief Executive Officer |
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Canaccord (Nomad and Joint Broker) | Tel: 020 7523 8000 |
Bobbie Hilliam | |
Investec Bank plc (Joint Broker) | Tel: 020 7597 5970 |
David Anderson | |
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Tavistock PR | Tel: 020 7920 3150 |
Simon Hudson / 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