REG - Litigation Cap. Mgmt - Outcome of Commercial Arbitration Investment

Litigation Capital ManagementAnnouncement

01/04/2025 07:00

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RNS Number : 9855C  Litigation Capital Management Ltd  01 April 2025

1 April 2025

Litigation Capital Management Limited

("LCM" or the "Company")

Outcome of Commercial Arbitration Investment

 

Litigation Capital Management Limited (AIM:LIT), an alternative asset manager
specialising in dispute financing solutions internationally, announces that it
has been unsuccessful in a commercial arbitration brought before the London
Court of International Arbitration, in which LCM provided funding to the
claimant.

The tribunal found against LCM's funded party. The subject matter, findings
and funding terms remain confidential.  As is typical in commercial
arbitration, the avenues for appeal are limited.  LCM is currently assessing
potential next steps in collaboration with the funded party and legal
representatives.

This investment was co-funded by Fund I.  LCM has invested £2.5m (A$5.1m) of
its own capital into the case alongside £7.5m (A$15.2m) of investment from
Fund I.  As of 31 December 2024, the investment was recorded at a fair value
of £17.0m (A$34.4m) from LCM's perspective inclusive of anticipated
performance fees.  This fair value was based among other factors on the
advice of an independent Kings Counsel immediately before the hearing
confirming both prospects of success and quantum.   Importantly, LCM has no
exposure to adverse costs, and Fund I's performance remains robust, with the
Net Realised IRR standing at 35% post this unsuccessful investment.

Fair value accounting in legal finance reflects both the risk and potential
rewards inherent in high-value commercial disputes.  As cases progress
towards resolution, fair value assessments may reflect significant multiples
of invested capital.  LCM continues to refine and enhance its valuation
methodology to ensure a disciplined and consistent approach to the assessment
of ongoing investments.

Patrick Moloney, CEO of LCM commented: "While this outcome is disappointing,
we remain steadfast in our confidence in the strength of our broader
portfolio. Legal finance inherently involves binary outcomes, and while this
case did not deliver the expected result, our long-term track record
demonstrates our ability to generate strong returns. We continue to believe in
the substantial value embedded in our portfolio and remain focused on
delivering successful outcomes for our investors."

 

Enquiries

 Litigation Capital Management
 Patrick Moloney, Chief Executive Officer

 David Collins, Chief Financial Officer

 Cavendish (Nomad and Joint Broker)                                    Tel: 020 7523 8000
 Jonny Franklin-Adams, Isaac Hooper and Rory Sale (Corporate Finance)

 Tim Redfern and Jamie Anderson (Corporate Broking)
                                                                       Tel: 020 7597 5970

 Canaccord Genuity (Joint Broker)
 Bobbie Hilliam

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 (http://www.lcmfinance.com)

 

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