Litigation Capital Manag... Share Discussion Threads

[nchanning] 08/10/2024 19:35

Announcement by Greenx at 7:40 this morning , can't expect management to do instant RNS in 20 mins pal

[maddox] 08/10/2024 18:55

The fair value attributed to in-flight case investments is a multiple of invested capital (MOIC) of 1.9x, so that's the multiple this case would be valued. LITs historic MOIC is 2.8x on all concluded cases. Their target is to achieve 4x I believe. This case will help.

Recently, we've been trading around NAV £95m so including FV of 1.9x - clearly highly conservative.

[mtioc] 08/10/2024 15:58

CEO said potential to be most successful LCM investment ever.

It would be really interesting to know fair value of this matter at last reporting date. Although an extreme example, it should bring home the point to institutions that there is significant unrecognised value in the portfolio with real potential for NAV uplifts at matter conclusiond.

Irony is that smart US endowment and pension fund investors get it and backed LCM over a multi fund cycle. UK listed small cap institutional investors don’t and bleat about dividends.

[kallistos] 08/10/2024 13:44

Thanks, someuwin, for posting that. Pretty clear, I'd say.

[tradertrev] 08/10/2024 12:21

Well now you know - RNS out, though the answer was available on the Burford board a few hours ago!

[gallamar] 08/10/2024 11:09

I guess at least x5 from performance fees. Could be 30m usd from 2.8 invested. Remarkable really.

An amazing compounding stock

[someuwin] 08/10/2024 11:07

Positive update on Fund I investment

Litigation Capital Management Limited (AIM:LIT), an alternative asset manager specialising in dispute financing solutions internationally, announces a positive development on an investment within its Fund I portfolio.

LCM has funded a claim advanced in respect of an international arbitration claim brought against the Republic of Poland under the United Nations Commission on International Trade Law (UNCITRAL) Rules. The Tribunal has unanimously held in favour of the funded party that the Republic of Poland breached its obligations under the Australia-Poland Bilateral Investment Treaty and the Energy Charter Treaty.

The quantum of the award entered in favour of LCM's funded party totals A$490 million plus interest.

LCM's funded party has therefore been successful in the claim. If the award is not subject to challenge and is not satisfied the dispute will move to an enforcement stage. We will assess any further funding requirements once the enforcement strategy has been finalised.

The total investment into the case to date is A$16.6 million (US$11.3 million). This investment comprises A$4.2 million (US$2.8 million) from LCM's own balance sheet and A$12.4 million (US$8.5 million) of third party capital from Fund I. In line with our usual practice LCM's returns are calculated as a rising multiple of invested capital over time.

This investment is no longer attended with liability and quantum risk as that has been decided. Final performance will be announced to the market after conclusion of the investment. However, if the award is satisfied within a reasonable period without the need for enforcement, then based upon the contractual terms with the funded party as at the date of this announcement, LCM would be entitled to a multiple of 6 times its own invested capital plus significant performance fees on third party capital invested.

Patrick Moloney, CEO of LCM, commented: "This announcement represents a very significant milestone in this investment. Subject to any challenge to the very favourable and unanimous award we now move to an enforcement stage. This investment is part of Fund I and therefore stands to benefit from significant performance fees giving it the potential to be the most successful investment in LCM's history."

[makinbuks] 08/10/2024 10:47

Why would they not have a RNS ready to go?

[sspurt] 08/10/2024 09:51

...on 6x daily volume by 11am

[someuwin] 08/10/2024 09:46

30/06/2020

LCM will provide up to US$12.3m (A$18m) in limited recourse financing which is repayable to LCM in the event of a successful Claim or settlement of the Dispute that results in the recovery of any monies. If there is no settlement or award, then LCM is not entitled to any repayment of the financing facility. In return for providing the financing facility, LCM shall be entitled to receive repayment of any funds drawn plus an amount equal to between two and five times the total of any funds drawn from the funding facility during the first five years, depending on the time frame over which funds have remained drawn, and then a 30% interest rate after the fifth year until receipt of damages payments.

The LFA also includes other standard terms and conditions for litigation funding agreements.

[someuwin] 08/10/2024 09:17

The GRX case was definitely part of Fund 1 as this 20 December 2022 RNS states...

"Following recent press speculation, the Company is providing an update on a further Fund I investment involving claims against Poland under both the Energy Charter Treaty (ECT) and the Australia-Poland Bilateral Investment Treaty (BIT), which has now been heard by an Arbitral Tribunal. Following completion of the hearing, the Arbitral Tribunal will render an Award in due course. There is no specified date for an Award to be rendered and there is no certainty as to what the outcome of that Award will be."

[maddox] 08/10/2024 09:13

Yes, welcome back 74Tom.

[sspurt] 08/10/2024 08:40

Anyone know why we are up 16p this morning?

[johnwig] 08/10/2024 08:38

Welcome back, 74tom. It's good to have your expert views. I understand why you sloped off because the last few months have seen some really inexplicable manipulations here which have baffled this private investor. Don't disappear again until this hits 2 quid, OK?

Thanks to the brave few who continued to try to explain the unexplainable in the meantime!

[nchanning] 08/10/2024 08:03

Fund 1 is now all but guaranteed to be considered a resounding success by investors , bodes very well for the chances of raising an even larger Fund 3 on the same very favourable terms for LIT

[gallamar] 08/10/2024 08:02

This deal technically could be in a fund. I think fist close was mar 2020 and they funded later than that. If so gain might be 50pct of total buy huge IRR

Agree with others the real story today is PAT.l. their claim will likely be 1bn ( same as greenex) and they are valued at 12m gbp.

Once the market realises the potential win it will bag

[nchanning] 08/10/2024 07:51

Feels frustrating when cases drag on way past expected date for resolution but actually it's just a positive for LIT who get a better MOIC the longer it takes

[nchanning] 08/10/2024 07:49

Judgement basically unappealable other than on technical grounds about court jurisdiction etc . Poland now has technocratic , internationalist government , probably pays swiftly and blames last government for the mess

[brad_k] 08/10/2024 07:27

Good timing on the 286K share buyback last Friday then. Hopefully the lack of an RNS explains the current selling.

[74tom] 08/10/2024 07:06

The big one has finally landed here, £252m awarded to GRX in a unanimous decision... so that's likely 5x $12m owed to LCM + the investment amount = £55m? So over the half the market cap.

LCM now have 2 from 2 in international arbitration, the odds on PAT success now look fantastic...

[someuwin] 08/10/2024 07:02

GREENX WINS COMPENSATION AND INTEREST TOTALLING £252M MILLION IN SUCCESSFUL ARBITRATION OUTCOME

[l2b] 08/10/2024 03:19

GRX into TH until Thurs for UNCITRAL claim v Poland. 

This is a big one - LCM US$12 (A$18m) funding and we're in Year 5 so we are looking at 5x if we win (based on 2020 agreement). 
I believe this is Fund I so our cut of costs will be US$3 (A$4.5m) but we get the extra sauce from performance fees so potentially 10x MOIC makes it a big number. 

It's been a quiet few months but this would completely make our FY alone (PY $21m opex + $10m interest).
Hang on to your hats!

announcements.asx.com.au/asxpdf/20241008/pdf/068vkyszk6nv00.pdf

[gallamar] 23/9/2024 16:42

I am actually a fan of debt, even at the old levels.

Debt allows us to smooth out the lumpy cashflows and if it costs 13pct vs an IRR of over 30pct it is value additive