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18 March 2020

LCM doubles revenue for half year as it points to success of law firm alliances

Sydney-based litigation funder unveils strong set of results boosted by portfolio deals

By Ben Rigby

Portrait of Patrick Moloney

CEO Patrick Moloney development of portfolio strategy gaining traction

UK-listed litigation funder Litigation Capital Management (LCM) has announced strong half-year figures as it seeks to build strategic alliances with law firms to generate cases.

The Sydney-based funder’s income rose by 105% to A$24.1m ($14.2m) against a 113% increase in gross profits to A$12.2m ($7.2m).

Return on capital since 2012 to the half-year stage in 2020 stood at 139%, with LCM drawing on A$18.4m of capital on litigation investments, as opposed to A$12.8m for the previous period.

Key to the improved performance were the contributions made by four single-case investments in Asia-Pacific, including LCM’s home market of Australia, which generated combined revenue of approximately A$14.9m.

LCM said its strategy of forging alliances with law firms and agreeing portfolio funding deals with companies was proving to be successful.

In June, Clyde & Co, one of two law firm partners, arranged for a global aviation client to access funding for 38 disputes and contractual claims.

LCM is working with a second law firm on a portfolio of construction cases. Two out of seven cases funded within that portfolio have been resolved, generating revenue of A$8.6m and A$4.3m of profit. 

Patrick Moloney, CEO of LCM, said the development of its corporate portfolio strategy was gaining significant traction.

Nick Rowles-Davies, executive vice-chairman, added: “Momentum in corporate portfolio opportunities has increased in the first half with the fund now enabling LCM to invest in larger corporate portfolio transactions which have previously been beyond the capacity of our balance sheet. This provides an important catalyst for the ongoing development of LCM’s corporate portfolio strategy.”

Last week, LCM completed the first close of a new $150m fund, marking its return to managing third-party funds while Burford Capital blamed disruption in New York, where its financial team is predominantly based, on a delay of two to three weeks in the release of its fiscal year 2019 financial results.

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