Litigation Capital Management Ltd (LON:LIT) said it expects its second specialist litigation fund with a size of US$300mln to close this quarter after strong interest from potential investors.
In a trading update for the year ended 30 June 2021, LCM revealed that its existing fund Global Alternative Returns (GAR) fund currently is 76% committed at US$115mln out of US$150mln.
Total portfolio capital commitment is now US$181mln comprising US$105mln of Direct investments alongside a further US$76mlm of Fund co-investment.
Applications over the year increased 10% with 572 applications received, though LCM said the disruption caused by COVID-19 meant the level of commitments was down due to due diligence and investment selection taking longer.
This increased due diligence time recognises a general slow-down in all sectors of legal services consequent upon COVID, added the statement.
Patrick Moloney, chief executive, added: "LCM and our team have performed very well in what has been a tough and disrupted year.
“The GAR Fund is now over 75% committed, and we are making significant progress on the second fund with strong support from both existing and new investors. Notwithstanding some disruption to global justice systems, LCM's portfolio of disputes continues to mature.”
In June, the High Court in New Zealand found in favour of the plaintiff in a case backed by LCM and Moloney added: "We are pleased to have achieved a significant resolution of an investment close to the end of the financial year which has generated strong revenue and exceptional performance metrics”.
He added that the track record remains robust with a 10-year ROIC [return on capital] as of 30 June 2021 of 153% and cumulative portfolio IRR [rate of return] of 78%.
The recent resolution achieved an IRR of 121% and an ROIC of 313%
"We look forward to the coming year with optimism and an expectation that global economic conditions will be very conducive to growth.”