Litigation Capital Manag... Share Discussion Threads

[makinbuks] 03/4/2023 08:20

More encouraging return statistics today from the Comet case. Fund 1 investors must be feeling encouraged although they might look across at the returns the company is making and wonder why they don't just buy the shares

[jackson83] 31/3/2023 20:28

WHERE IS THE DIVIDENT ??????


2 many still holding / selling from 65p ... any rise been sold into



no share tips from funky finance Mateus or interest as we were duped into thinking it was a 10 x bagger

[luweiluwei] 31/3/2023 16:55

Burford up a lot on Petersen case news.
Doesn't look like it had any impact on LIT or other litigation funders. Maybe next week.

[jackson83] 31/3/2023 15:10

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[jackson83] 30/3/2023 15:50

60p soon





























































































































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[jackson83] 30/3/2023 15:49

where are the RAMP CREW!!! NOW ???




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another FUNKY FINANCE mess






































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[serapuff] 23/3/2023 13:25

ah ok anyone can DM me?

[tradertrev] 23/3/2023 12:21

Nick is very interested in litigation which means you're probably not going to get an answer to your question in print!

[serapuff] 23/3/2023 11:35

What's the story with Nick being a chancer? I'm a fairly new investor to this company, so not aware of this part of the back story - just know that Nick got fired over expenses (which obviously can't be true).

Gideon

[serapuff] 23/3/2023 11:34

On the 3.2M - it can't be clawed back in future, meaning it's fully earned.

He's just saying that if there are losses in future cases, it will be offset by wins in even later cases before performance fees on these later cases are paid

Gideon

[makinbuks] 23/3/2023 10:53

Yes, as always with these things its not black and white. It is reasonably transparent at the moment because there are so few actual case results. In future though, if you have four funds for example and multiple case results on a monthly basis this kind of thing becomes much more opaque

[maddox] 23/3/2023 10:42

Hi Makinbuks,

I can see the fairness that fees taken on a win should be off-set against cases which are subsequently lost. This approach has the benefit of more timely revenue recognition - I don't see this is an overstatement of prior profits - as the claw-back only occurs if an when a loss later occurs. Otherwise there will long lag between accrued fees being recognised - so on balance I far prefer this approach.

[makinbuks] 23/3/2023 10:38

My feeling on people are that Maloney made the decision to expand to the UK and chose a partner. He was then blown off course because he himself couldn't relocate due to COVID and the partner turned out to be a bit of a chancer. Now he's here and he's invested in a good looking new team. That must push costs up which may be what's behind your question but with Maloney now firmly in the drivers seat that growth in cases and investment in the UK can finally be realised

[robsy2] 23/3/2023 10:13

The Q& A is very detailed. It is a feature of the Investor Meet Platform that a lot of people, well me at least, had not fully appreciated.
While he did give an answer to all the questions,his answer to my question asking him what the average cost per employee was?... was that they don't keep that stat!
Anyway , I am still sat on a loss here but am fairly comfortable. I feel that the hard yards have been done and am confident that the returns should start to flow nicely over the coming years.

[makinbuks] 23/3/2023 09:46

Thanks for highlighting that I didn't appreciate that facility was there. I applaud him for commenting in detail. I can see that the A$3.2m is "earned" but still think the revenue recognition under IFRS is at least a consideration while this true up plays out. As I understand it, if future cases are lost we have to write off our costs and additionally bear a portion of the funds costs, hence our loss on that case in isolation is exaggerated or put it another way our previously declared income was inflated.

[serapuff] 23/3/2023 02:56

@Makinbuks - Patrick heard you and responded in the Q&A on whether 3.2M can be clawed back:

hxxps://www.investormeetcompany.com/investor/meeting/investor-presentation-265

Q21

- Can't be clawed back
- But true-up mechanisms where in future, losses get repaid first before future performance fees are made.

Gideon

[makinbuks] 20/3/2023 09:06

Yes I agree that is impressive. Surprised the price hasn't stepped up

[robsy2] 20/3/2023 07:27

Good news. Further validation of the value on offer here.

[spectoacc] 20/3/2023 07:10

"Litigation Capital Management Limited (AIM:LIT), a leading international alternative asset manager of disputes financing solutions, announces that on 17 March 2023 Jonathan Moulds, Chairman of the Company, purchased 1,675,000 ordinary shares in the capital of the Company ("Ordinary Shares") at a price of 71.35 pence per Ordinary Share.

In addition, on 17 March 2023 Patrick Moloney, Chief Executive Officer of the Company, purchased 157,092 ordinary shares in the capital of the Company ("Ordinary Shares") at a price of 71.00 pence per Ordinary Share.

Following the above purchases, Mr Moulds has an interest in 5,250,000 Ordinary Shares, which represents 4.40 per cent. of the issued share capital of the Company, and Mr Moloney has an interest in 10,437,100 Ordinary Shares, which represents 8.76 per cent. of the issued share capital of the Company."

[serapuff] 15/3/2023 11:46

@Makinbuks - I went to listen through the part again (43 mins).

He said

- The performance fee is paid on a case by case basis, meaning independent of performance future cases (this is also my understanding of American waterfall).
- I think what he means for that specific case, it may still be possible to have a square up/claw back for whatever reason, and if it happens it will happen quickly, and it will be clawed back from the next case settlement.

Why it could have a claw back/square up, I'm not sure, but conceivably something happened to change the settlement amount, or for some reason or other the counterparty doesn't pay up (although I imagine they only get their performance fee after the counterparty pays up)

Gideon

[makinbuks] 15/3/2023 11:38

What did you make of Maloney' answer about the A$3.2m performance fee being repayable depending on future results in Fund 1? I thought he was evasive but to be fair again IFRS is quite strong on this now

[serapuff] 15/3/2023 11:24

@makinbuks
- I don't read too much into the adjusted numbers or the income before/after resolutions as I am more concerned of the underlying performance of the current investments (delayed)

However,
- Fund administration expense - in the footnote it said that on pg 5 of the interim report, it says that it is wholly attributable to third party interests. Sounds like they can claw back from investors as the fund produces return. Similarly the balance sheet has a -5,231 which reduces the liabilities due to third party interests - sounds like what the third party "owes" them for setting up the fund

- I'm not sure about share based payments and litigation fees - those seem to occur every year so I just include it as normal opex
- the Opex has been quite stable every half so I just use that number as a ballpark. They are very lean.

- Key for me is whether management can demonstrate what they have been saying to the market last few results (mature portfolio which will realize at historical MOIC). That's why the response to my question on why the returns on Australian class action was low was important. It was good for them to clarify that this is the exception rather then the norm.

- At least they have demonstrated the economics of the fund structure with the KPMG settlement, which is quite important. Looking at Omni bridgeway, one reason they are doing so badly is because their Fund 1 which is realizing right now has seen most of the economics go towards the external investor, and they are quickly writing down their share of intrinsic value of the portfolio. Burford has also came out to say that they are shifting more of the investments to their own balance sheet which may indicate the fund model is not working for them.

Gideon

[makinbuks] 15/3/2023 10:20

Some good analysis and comment here , thanks

One additional topic, "Adjusted loss for the period A$5.5m reflecting conservative revenue recognition. Post balance sheet resolutions would have increased LCM only performance to an adjusted operating profit of A$6.3m"

But the statutory loss was A$10.9m after interest and one offs. Those one offs were additional OPEX of A$1.7m detailed in note 5. Why would "Fund Administration Expenses A$1m" and "Share based payments A$0,3m" not be considered regular expenses? I presume "Litigation fees A$0.2m" relates to the departed UK head which could be non recurring or could be something that is yet to be resolved - no comment from Maloney and my question went unanswered

Note also that further OPEX in the form of fund set up fees are capitalised and written down over the lifetime of the fund. This is IFRS compliant but OPEX is not as simple as twice the number quoted for this HY at A$7m