Omni Bridgeway Ltd · ASX:OBL
Omni Bridgeway — H1 2024 Earnings Presentation
24 slides from Omni Bridgeway's earnings presentation, Feb 29, 2024
Slide 1: 1H24 results
1H24 results 29 February 2024
Slide 2: Contents
Contents 01 Highlights 04 Fair value 02 Strategic priorities 05 Annexure 03 Financial results Further information on the terms used in this presentation is available on slide 23. 1H24 RESULTS | 29 FEBRUARY 2024 2
Slide 3: Highlights
Highlights For the 6 months ended 31 December 2023 2 Investment income and fee revenue Commitments Funds under management $155.5m +53% on 1H23 $259.8m ~$3.2bn Plus $28.6m of income recognised 42% of our FY24 target and 58% Growth driven by first close of Fund 4 post 31-Dec, and $60.4m total IYTBR of
Slide 4: Investment highlights
Investment highlights 6 6 # MOIC (x) IRR (%) Income ($m) OBL-only($m) 12 Full completions/ Completed/ 7 6 Partial completions/ 2.4x 55% $146.7m $29.1m Partially completed 1 secondary market transaction 1H24 Income8 yet to be recognised 5 3.6x 66% $39.1m $2.3m (IYTBR) Completed/ 31-Dec-23 3 2.0x 130%
Slide 5: Strategic priorities
Strategic priorities Medium term target Investor day FY24 goals • $1bn annual new commitments or • Scheduled for 27 March in Sydney. • Finalising the establishment of Fund 8, our €300 equivalent value through improved million global enforcement fund – completed. • Further background and explanation
Slide 6: Non-IFRS OBL-only cash P&L
Non-IFRS OBL-only cash P&L $m 1H24 • Positive net cashflows from investments. • Majority of deployments relate to ongoing investments expected Litigation investments proceeds 60.1 to generate litigation investment proceeds in future periods. Proceeds from secondary market transactions 6.3 Investment
Slide 7: OBL-only cashflows and liquidity
9 OBL-only cashflows and liquidity • In aggregate, we have ~$183m to meet operational needs, interest payments, $60m and fund investments before cash proceeds from any investment $14m completions, secondary market sales, $48m management and performance fees. $23m $28m • Excludes cash proceeds from $
Slide 8: Improving cost coverage ratio
Improving cost coverage ratio Fund FY19 FY20 FY21 FY22 FY23 1H24 FY24F $m Management and other fee income Fund 1 – – – – – $0.2m 30 Funds 2&3 – – – $1.8m $0.4m $0.2m Fund 4 $0.1m $1.2m $2.0m $2.7m $3.3m $2.3m 20 Fund 5 – $0.2m $0.9m $2.0m $2.7m $3.3m 2H24F 11 Fund 6 – $6.5m $14.6m $10.5m $10.1m $4.3
Slide 9: Continued portfolio growth to generate future income
Continued portfolio growth to generate future income 1 1 Investments carrying value Commitments $822.7m 6% $259.8m FY24 target CAGR 1 74.7 (71.1) 625 6% 67.9 GR2 CA 544.2 177.0 29.7 (61.5) Remaining 163.4 210.0 463.3 target 19.9 152.0 181.4 412.6 105.2 42.0 Incremental 313.2 value through $822.7m im
Slide 10: Funds summary
Funds summary Amounts attributable Amounts attributable Fund Breakdown to NCI to Omni Bridgeway Capital Total Total distributions Capital Committed - Capital capital (capital and At 31-Dec-23 Committed Fund size Recycling Deployed Undeployed uncommitted Other Costs called returns) Capital Returns Ca
Slide 11: Diversified portfolio Fair Value
Diversified portfolio Fair Value 23 1 • $2.5bn Fair Value of the balance sheet and funds investment portfolio at 31-Dec-23, based on NPV of loss-adjusted probability-weighted future investment cash flows discounted at 12%. • New commitments in 1H24 have added $363 million of Fair Value, representing
Slide 12: Fair Value methodology
Fair Value methodology Assumptions • Outcome scenarios – the points during the life of an investment when it may complete in whole or in part • Cash flows – the amount and timing of outgoing and incoming cash flows over the life of the investment • Probabilities – the probability of each cash flow a
Slide 13: Annexure
Annexure 1H24 RESULTS | 29 FEBRUARY 2024 13
Slide 14: Fair Value framework
Fair Value framework Omni Bridgeway’s fair value approach is based on probabilistic scenario analysis. At inception the Fair Value of an investment is determined: • As the net present value of the future loss-adjusted probability-weighted investment Typical material litigation developments include:
Slide 15: Simplified Fair Value case study
Simplified Fair Value case study Background information EPV reporting The case study investment consists of a merits dispute, with an estimated • In this example, the EPV would be set at $60m being the estimated claim value of up to $60 million. The anticipated timeline for receiving a claim size, a
Slide 16: Simplified Fair Value case study – continued
Simplified Fair Value case study – continued 1H24 RESULTS | 29 FEBRUARY 2024 16
Slide 17: 1H24 Financial results
1H24 Financial results Change from $m 1H24 1H23 1H23 Consolidated Group Litigation investments proceeds 115.2 96.1 20% Proceeds from secondary market transaction 31.5 – Litigation income proceeds (grossed up to include all Funds at 100%) 146.7 96.1 53% Third party income from sale of investment vehi
Slide 18: Investment income
Investment income Balance Funds • $146.7m income recognised in 1H24 comprises: 1 $m sheet 1 2&3 4 5 6 8 Total – $70.7m from 12 fully completed investments. Investment income Investment income – $42.9m from ongoing investments. Investments completed in 1H24 – – 4.6 44.7 8.7 9.2 3.5 70.7 – $1.6m from
Slide 19: Structure of Funds
27 Structure of Funds • If an investment is successful, the defendant will pay an agreed amount to the claimant's lawyers trust account. • The lawyer will deduct the fees owing to the Group and pay the balance of funds to the client. • If the claim fails, the Group is responsible for paying the coun
Slide 20: Current portfolio and track record
Current portfolio and track record 28 29,30 Current funded investments Completed investments Possible EPV Success rate Average completions in the Average $ weighted At 31-Dec-23 # duration next 12 month EPV # duration average MOIC IRR Fund 1 – – – 35 3.5 yrs 69% 1.35x 9% Funds 2&3 21 4.6 yrs $1,533m
Slide 21: Regulatory landscape
Regulatory landscape • UK In July 2023, in PACCAR Inc v Competition Appeal Tribunal, the UK Supreme Court held that the litigation funding agreements (LFAs) at issue were damages-based agreements US (DBAs) within the meaning of the relevant legislation in England. As a • Some US courts have set rule
Slide 22: Footnotes
Footnotes 1 Fund 5 is not consolidated within the Group Consolidated Financial Statements, here it is presented at 100%. 20 Data for Fund 6 is current at 30 September 2023. 2 Funds and third party capital in investments managed by OBL. 21 Fund size is €150m plus an over commitment allowance of 25%.
Slide 23: Notes
Notes • The investments of Funds 2&3, Fund 4, Fund 6 and Fund 8 are consolidated within the Group Consolidated Financial Statements, along with the interest of the respective external Fund investors if applicable. • Fund 1 was deconsolidated on 31 May 2023. The associated EPV, effective from that da
Slide 24: Offices and contact details
Americas Asia-Pacific Europe, Middle East & Africa Chicago Minneapolis Montreal Montevideo Melbourne Hong Kong Amsterdam London Dubai +1 872 260 2057 +1 612 488 9211 +1 514 257 6971 +1 514 257 6971 +61 3 9913 3301 +852 3978 2629 +31 70 338 4343 +44 203 968 6061 +971 4 514 4608 500 West Madison 60 So