Litigation success rate at 89% for IMF Bentham
Litigation funding firm, IMF Bentham, has recorded a portfolio value increase of 68 per cent to $9.5 billion thanks to a litigation success rate of 89 per cent, according to its full year results.
The firm’s investments were up 33 per cent to $427 million, cash was up 41 per cent to $226.5 million, net assets were up 40 per cent to $515.5 million, and its portfolio value was up 68 per cent to $9.5 billion.
The firm provides dispute resolution finance and strategic know-how to corporation, individual claimants and their professional advisers to help them resolve their disputes.
However, the firm reported a net loss after tax of $36.1 million as income was impacted by litigation results and an investment in its costs in line with its geographic and fund expansion.
“FY19 results were also impacted by delayed completions for a number of investments,” it said.
“The legal industry is reporting slower resolution rates in a number of jurisdictions due to the increased complexity of disputes and a propensity for legal decision makers to increase spending on litigation and protract negotiation and/or proceed to trial.”
The report also noted that Australia’s legal services market in 2018/2019 was estimated at $20.8 billion and was forecast to grow at an annualised rate of two per cent over the next five years to reach $22.9 billion in 2023 to 2024.
“Regulatory changes and the banking Royal Commission have contributed to demand for legal services,” it said.
“There are also opportunities to fund defence costs as part of a portfolio that includes plaintiff-side/affirmative claims (e.g. in mixed portfolio financing for corporates) so the total addressable market for our funding is potentially larger than the estimates.”
IMF Bentham also said that the Royal Commission could impact its business in two ways – additional class actives and tightened corporate governance requirements affecting all Australian businesses – both it considered to be positives.
Recommended for you
Lonsec and SQM Research have highlighted manager selection as a crucial risk for financial advisers when it comes to private market investments, particularly due to the clear performance dispersion.
Macquarie Asset Management has indicated its desire to commit the fast-growing wealth business in Australia by divesting part of its public investment business to Japanese investment bank Nomura.
Australia’s “sophisticated” financial services industry is a magnet for offshore fund managers, according to a global firm.
The latest Morningstar asset manager survey believes ETF providers are likely to retain the market share they have gained from active managers.
