Litigation Capital Management Ltd First close of a new US$150 million fund (5146F)
10 Marzo 2020 - 8:00AM
UK Regulatory
TIDMLIT
RNS Number : 5146F
Litigation Capital Management Ltd
10 March 2020
10 March 2020
Litigation Capital Management Limited
(LCM or the Company)
LCM completes first close of a new US$150 million fund
Litigation Capital Management Limited (AIM:LIT), a leading
international provider of litigation financing solutions, is
pleased to announce the first close of a new third party fund of up
to US$150 million, LCM Global Alternative Returns Fund ( the Fund)
. In accordance with the Company's strategy and as previously
communicated to the market, the close of this Fund marks LCM's
return to managing third-party funds, following the building of a
permanent source of balance sheet capital through the equity
markets.
Managed by LCM, the Fund will supplement the deployment of
capital from LCM's own balance sheet, significantly increasing its
ability to invest in new opportunities in line with its stated
strategy. The Fund will target global dispute finance investments
including both single disputes and corporate portfolio
transactions, further detail on the investment pipeline is set out
below.
Fund participants
-- The Fund's cornerstone investors include firstly the large
endowment of a US University and secondly, the asset management
division of a large global investment bank. Both have extensive
experience of investing in the litigation finance asset class and
entrenched rights to participate in future funds raised by LCM,
demonstrating their commitment to LCM and also to the asset class
more widely.
-- Three further participants in the Fund include: a further
US-based university endowment, a Swiss based fund manager
specialising in investing in litigation finance and a substantial
European family office with significant investment experience in
litigation finance.
Structure
-- The Fund will co-invest with investments from LCM's balance sheet on a 75:25 basis
-- LCM's balance sheet contribution (25%) will be invested and
advanced on a monthly basis over the term of each investment, no
upfront contribution will be required
-- Performance fees will be payable to LCM as fund manager on
the basis of a deal by deal waterfall
-- In addition to receiving its 25% share of any profit from
each investment from its co-investment, for the provision of its
management services LCM will also receive:
- 25% of profit on each Fund investment as and when it matures
over a soft return hurdle (full catch up) of 8%; and
- an outperformance return of 35% for all Fund returns over an IRR of 20%.
-- The Fund has a term of six years including an inception
period of two years during which investments can be entered into
(the Inception Period)
The Fund as at first close has raised US$140 million, leaving a
balance of up to US$10 million to be raised in due course. The
decision to hold a first close of the Fund before all commitments
were ready to be made, was driven by a strong pipeline of quality
investment opportunities with which the Fund could be seeded. The
Fund will be seeded with nine single case investments which include
international arbitrations, class actions, commercial litigation
and investor state treaty claims. These investments are not being
seeded from LCM's existing balance sheet portfolio which it will
continue to manage. The total capital commitment of the seeded
investments amounts to approximately US$33 million representing a
total commitment of 22% of the Fund upon inception. LCM is
confident that the Fund will be fully committed comfortably inside
the two year Inception Period.
Patrick Moloney, CEO of LCM, commented: "The entry into this
external fund provides a significant increase to our available
capital and a boost to our investment capability, enabling us to
broaden and accelerate the expansion of our portfolio with a view
to ultimately delivering greater returns for shareholders.
"It also constitutes the first step towards LCM operating a
funds management business. Indeed, future funds will be underpinned
by the entrenched rights of our cornerstone investors.
"It is testament to our disciplined approach and track record
that the Fund attracted such significant international investment
in the sector, giving us scope to accept investment from only the
very best and most experienced global providers of third-party
capital into the asset class."
Nick Rowles-Davies, Executive Vice-Chairman of LCM, added: "The
fact such high calibre investors have insisted upon entrenched
contribution rights in future funds is a very valuable endorsement
of LCM's ability to attract blue chip investment capital on a
global scale.
"We are delighted to welcome our new partners and look forward
to working closely with them to capitalise on the growing number of
attractive opportunities available in the global litigation finance
space."
Further updates with respect to the Fund commitment and its
performance will be made as appropriate.
Enquiries
Litigation Capital Management c/o Alma PR
Patrick Moloney, Chief Executive Officer
Canaccord (Nomad and Joint Broker) Tel: 020 7523 8000
Bobbie Hilliam
Investec Bank plc (Joint Broker) Tel: 020 7597 5970
David Anderson
Asante Capital Group (D istribution agents Tel 020 3696 4716
on fund raise)
George Lyons
Alma PR Tel: 020 3405 0205
Rebecca Sanders-Hewett LCM@almapr.co.uk
Justine James
David Ison
NOTES TO EDITORS
Litigation Capital Management (LCM) is a leading international
provider of litigation financing solutions. This includes
single-case and portfolios across; class actions, commercial
claims, claims arising out of insolvency and international
arbitration. LCM has an unparalleled track record, driven by
effective project selection, active project management and robust
risk management.
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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END
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