Omni Bridgeway Ltd · ASX:OBL
Omni Bridgeway — IMF Bentham — FY2018 Earnings Presentation
30 slides from Omni Bridgeway's earnings presentation, August 2018
Slide 1: FY2018 Full Year Results Investor Presentation
FY2018 Full Year Results August 2018 Investor Presentation
Slide 2: FY 2018 Summary
FY 2018 SUMMARY ▪ Third year of progress on five-year Strategic Business Plan ▪ Two new investment vehicles launched Oct 2017 (‘RoW Funds’) to fund investments outside USA ▪ RoW Funds transition IMF from investing entirely on balance sheet to investing in, and managing, fund structures ▪ Majority of
Slide 3: Agenda
AGENDA 1. Background to IMF 2. Financial Results FY18 3. Portfolio 4. Funds Management 5. Future Plans 6. Risks and Disclaimers 3
Slide 4: Overview of IMF Bentham Limited at June 2018
OVERVIEW OF IMF BENTHAM LIMITED AT 30 JUNE 2018 IMF Bentham Limited has collected over $2.2 billion for clients and successfully resolved 90% of 175 completed cases since listing on the ASX in 2001 Human Capital ▪ A talented global team formed over 17 years, numbering 78 people ▪ Investment Committe
Slide 5: Worldwide Funding Solutions
WORLDWIDE FUNDING SOLUTIONS IMF Bentham Limited is a leading global litigation funding company with a track record of success, achieved over 17 years since listing on the Australian Securities Exchange in 2001. 5
Slide 6: Litigation Funding Market
LITIGATION FUNDING MARKET “Litigation is now a permanent fixture in the top five areas of in-house legal work as businesses deploy legal means as a business strategy tool” 1 1. 2017, Benchmarks & Leading Practices Report, Association of Corporate Counsel Australia, p 117. 6
Slide 7: Agenda
AGENDA 1. Background to IMF 2. Financial Results FY18 3. Portfolio 4. Funds Management 5. Future Plans 6. Risks and Disclaimers 7
Slide 8: Financial Results Overview
FINANCIAL RESULTS OVERVIEW 8
Slide 9: Earnings versus Free Cash Flow
EARNINGS VERSUS FREE CASH FLOW 134.0 132.5 114.0 113.3 99.8 94.0 92.3 74.0 75.9 $'millions 54.0 34.0 30.8 22.8 14.0 20.8 15.4 9.9 8.6 (6.0) (7.8) (10.2) (19.8) (26.0) (23.8) 2014 2015 2016 2017 2018 Earnings from continuing operations Free cash flow 1 Total cash generated 2 1. Free cash flow represe
Slide 10: Balance Sheet Strength
BALANCE SHEET STRENGTH Cash Investments1 Equity ($ Million) ($ Million) ($ Million) 321.3 367.8 160.2 144.9 26.0 5.5 142.5 175.4 139.4 134.2 130.1 198.8 190.9 206.3 105.6 10.3 2.4 180.6 203.93 201.40 192.40 191.10 185.90 145.6 122.5 99.5 98.6 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 20
Slide 11: IMF's Track Record of Success
IMF’s TRACK RECORD OF SUCCESS Revenue Summary Revenue to funded claimants $1,393M 62% Revenue to IMF: Reimbursement of funded amounts (40%) $346M 15% Net income (excluding overheads) (60%) $509M 23% IMF total revenue (100%) $855M 38% Total revenue generated $2,248M 100% The data contained in the Fun
Slide 12: Recent Completions by Region
RECENT COMPLETIONS BY REGION Recent Completions by Number of Average Success rate Success ROIC IRR IRR Region (excluding Investments Investment on number rate by $ excluding including withdrawals) Length of weighted overhead overhead investments average IMF Bentham Ltd (Australia 58 3.0 years 90% 89
Slide 13: Funding Applications
FUNDING APPLICATIONS ▪ Overall growth in applications FY17 to FY18 of 5% with strong contributions from new geographies in Canada, Asia and Europe ▪ Decline in Australia attributable, in part, to support being provided by Australian IMs to new geographies ▪ Annual results have confirmed view that ha
Slide 14: Actual and Budgeted Funding Commitments
ACTUAL AND BUDGETED FUNDING COMMITMENTS 250 $199m 200 $172m Funds Committed (A$m) $147m 150 $106m 100 $81m $54m 50 - Actual Actual Actual Actual Budgeted Budgeted FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 ▪ Material growth in funding commitments from FY15 to FY18 of 172%, including 39% growth in pas
Slide 15: Agenda
AGENDA 1. Background to IMF 2. Financial Results FY18 3. Portfolio 4. Funds Management 5. Future Plans 6. Risks and Disclaimers 15
Slide 16: Investment Portfolio at June 2018
INVESTMENT PORTFOLIO AT 30 JUNE 2018 ▪ Increase in number of investments currently funded to 75 at 30 June 2018 ▪ 5 further investments conditionally funded at 30 June 2018 ▪ Since the June quarter end, IMF has unconditionally funded 1 further investment and provided additional funding to 4 existing
Slide 17: Concentration Risk Issues
CONCENTRATION RISK ISSUES ▪ Over the past three and a half years IMF has focused on transitioning away from idiosyncratic risk to systemic risk of a portfolio, which has been reflected in the increased number of investments, across a broader range of case types, sizes and jurisdictions ▪ There remai
Slide 18: Investment Portfolio at June 2018
INVESTMENT PORTFOLIO AT 30 JUNE 2018 See notes to Investment Portfolio at 30 June 2018 (Slide 20) for further details Possible Possible Possible Priority IMF IMF share completion Preferred Number of EPV completion completion capital capital of FY2021 and return investments A$m FY2019 FY2020 deployed
Slide 19: Diversification by Type
DIVERSIFICATION BY TYPE ▪ Diversification of type of investments between balance sheet and funds. ▪ Opportunistic investor, so no hard rules on blend of investments, other than ▪ Fund 1 hard cap on patent claims; ▪ Concentration caps for individual and portfolio investments in both funds; and ▪ Geog
Slide 20: Notes to Investment Portfolio at June 2018
NOTES TO INVESTMENT PORTFOLIO AT 30 JUNE 2018 Notes to the Group’s Investment Portfolio Investments Included in Portfolio Possible Completion Periods The Investment Portfolio includes investments for which the IMF group or the The possible completion period is IMF’s current best estimate of the peri
Slide 21: Agenda
AGENDA 1. Background to IMF 2. Financial Results FY18 3. Portfolio 4. Funds Management 5. Future Plans 6. Risks and Disclaimers 21
Slide 22: US Fund – Commitments, Deployed, Capacity
US FUND – COMMITMENTS, DEPLOYED, CAPACITY At 30 June 2018 ▪ Rate of commitment was on schedule prior to sale of investments to Fund 1. ▪ Fund 1 structured to accommodate sale of balance sheet investments. ▪ Investments were subjected to third- party due diligence, and accepted by Fortress, endorsing
Slide 23: RoW Funds – Commitments, Deployed, Capacity
RoW FUNDS – COMMITMENTS, DEPLOYED, CAPACITY At 30 June 2018 ▪ RoW Funds commenced in October 2017, and is ahead of schedule in terms of commitments. ▪ The contribution from non- Australian investments is ahead of schedule and revised geographic limitations have been agreed to reflect this outcome. 2
Slide 24: IMF Capital Plans
IMF CAPITAL PLANS ▪ Given accelerated rate of deployment in both US and RoW funds, combined with strategy to invest through fund strucutres, IMF plans to launch new funds for US and non-US investments in FY19 ▪ The new US fund is targeting US$500 million fund size, of which IMF would contribute US$1
Slide 25: Agenda
AGENDA 1. Background to IMF 2. Financial Results FY18 3. Portfolio 4. Funds Management 5. Future Plans 6. Risks and Disclaimers 25
Slide 26: The Future
THE FUTURE Growth opportunities ▪ Financing solvent corporates across all jurisdictions ▪ Multi-party claims - Australia, Canada, UK/EU ▪ Strong pipelines in all jurisdictions ▪ Increase in number of IMs Ongoing Risk Mitigation ▪ Continued diversification of operations ▪ Adverse cost insurance to re
Slide 27: Agenda
AGENDA 1. Background to IMF 2. Financial Results FY18 3. Portfolio 4. Funds Management 5. Future Plans 6. Risks and Disclaimers 27
Slide 28: Risk Mitigation
RISK MITIGATION Risk Potential Impact Strategic Response Portfolio Concentration Potential for a funded case to be lost = IMF investment lost and ▪ Deliberate transition from idiosyncratic risk to systemic risk of a portfolio exposure to adverse costs ▪ Portfolio represents increased number of inves
Slide 29: Disclaimer
DISCLAIMER ▪ The material in this presentation has been prepared by IMF Bentham Limited (IMF) and is general background information about IMF's activities. The information is given in summary form and does not purport to be complete. ▪ A number of terms used in this presentation including; ROIC, EPV
Slide 30: www.imf.com.au info@imf.com.au
www.imf.com.au info@imf.com.au 1800 016 464