14 October 2021

Litigation Capital Management Limited

(LCM or the Company)

LCM completes US$200m first close of LCM Global Alternative Returns Fund II (Fund II)

with target of US$300m

Litigation Capital Management Limited (AIM:LIT), a leading international alternate asset manager of disputes financing solutions, is pleased to announce the first close of a second third-party fund, Fund II. In accordance with the Company's strategy and as previously communicated to the market, the close of Fund II accelerates our asset management strategy, managing third-party funds. With a target of US$300 million, total Assets Under Management (AUM) for LCM is expected to reach US$450 million on final close. This supplements the Company's balance sheet capital and allows us to expand and diversify our portfolio under management.  

First close of Fund II is predominantly underpinned by existing investors in LCM Global Alternative Returns Fund (Fund I), which comprises a large endowment of a US University and the asset management division of a large global investment bank. Both have extensive experience of investing in the litigation finance asset class.

Structure

The Fund II structure is very similar to Fund I and is detailed as follows:

·      Fund II 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 is 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 direct investment from its co-investment, the fund will pay performance fees to LCM as fund manager as follows:

-25% of profit on each Fund II 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 II returns which achieve a return over an IRR of 20%

·      Fund II has a term of six years including a commitment period of two years during which investments can be entered into (the Inception Period)

Fund II, as with Fund I, will target global dispute finance investments including both single disputes and corporate portfolio transactions.

At first close Fund II has raised US$200 million, leaving a balance of up to US$100 million to be raised in the subsequent months. The combination of the pace of committing Fund I, which is currently at 91%, a pipeline of quality investments and strong support from existing investors, meant LCM was well placed to commence the raise of a second fund and complete a first close.

Patrick Moloney, CEO of LCM, commented: "We are very pleased with the progress in terms of commitments for Fund I which have now reached 91%, particularly as this level of commitment has been achieved in markets which have experienced considerable disruption from COVID.

Achieving such a significant first close of Fund II is a major milestone and achievement for LCM. We were delighted at the endorsement from all existing investors in our first fund, who are predominantly participating for increased commitments in our second fund, demonstrating both investor commitment and confidence in LCMs attractive investment proposition. The first close of Fund II enables LCM to accelerate its growth strategy and provides us with increased flexibility of capital to allocate into markets which are very conducive to the litigation finance industry."

Enquiries

NOTES TO EDITORS

Litigation Capital Management (LCM) is an alternate 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