Litigation Capital Management Ltd · LSE:LIT

Litigation Capital Management — Q2 2025 Earnings Presentation

41 slides from Litigation Capital Management's earnings presentation, Mar 18, 2025

Slide 2: Presenters
PRESENTERS FY25 HALF YEAR RESULTS PRESENTATION PATRICK MOLONEY CHIEF EXECUTIVE OFFICER Patrick is a veteran of the disputes funding industry with over 20 years’ experience in the space. Patrick has been a Director of LCM since 2003 and the Chief Executive Officer of the group since December 2013 bas
Slide 4: HY25 – Strategic Progress – Navigating Challenges
HY25 – STRATEGIC PROGRESS – NAVIGATING CHALLENGES 01 02 STRONG RETURNS OUTSTANDING 03 MOMENTUM IN 04 PROGRESSING 05 DEBT FACILITY 06 SETBACKS ON 2 07 LOWER NEW ON CONCLUDED ARBITRATION FUND US AND AI REFINANCED ON AUSTRALIAN COMMITMENTS INVESTMENTS PERFORMANCE MANAGEMENT INITIATIVES IMPROVED TERMS C
Slide 5: Strong Momentum in Fund Management
STRONG MOMENTUM IN FUND MANAGEMENT FUND I FUND II • Fund size – US$150m • Fund size – US$291m • Committed – 100% • Committed1 – 75-85% • Drawn – US$132m • Drawn – US$50m • Returned – US$93m • Returned – US$3m • Realised net MOIC – 2.0x • Realised net MOIC – 0.41x • Target final net MOIC – 2.0x • Tar
Slide 6: Arbitration Success – Indiana Resources
ARBITRATION SUCCESS – INDIANA RESOURCES Treaty Arbitration against Tanzania • Total Capital Invested – US$4.0m (LCM share US$1.0m, Fund I share US$3.0m) • Award – US$110m • LCM ‘global’ recovery – US$19.6m • Duration – 48 months • LCM recovery – US$8.4m • Fund recovery – US$11.2m • LCM MOIC – 8.4x •
Slide 7: Arbitration Success – Green-X Metals
ARBITRATION SUCCESS – GREEN-X METALS Treaty Arbitration against Poland • Total Capital Invested – US$11.2m (LCM share US$2.8m, Fund I share US$8.4m) • Award >US$300m • LCM ‘global’ entitlement currently >US$67m • Potential for further investment in set-aside and enforcement proceedings • LCM entitle
Slide 8: Setbacks in the Period
SETBACKS IN THE PERIOD Two Australian class action trial losses at first instance Queensland Electricity claim Quintis • Consumer Law Class Action • Shareholder Class Action • Total Capital Invested – A$38m • Balance Sheet Investment • LCM Capital Invested – A$25m • Total Capital Invested – A$13m •
Slide 9: Leading Long-Term Track Record
LEADING LONG-TERM TRACK RECORD 2.4x MOIC achieved across 13.5 year track record ADJUDICATED WINS (7) A$160.2M 5.2X MOIC A$30.9M IS ATTRIBUTABLE TO REALISATIONS 124% IRR1 A$296M ADJUDICATION WINS IN A WEIGHTED AVERAGE OF 38 MONTHS. TOTAL COMMITMENTS ADJUDICATED LOSSES (6) A$0.1M A$43.0M IS ATTRIBUTAB
Slide 11: HY25 Portfolio Progress
HY25 // PORTFOLIO PROGRESS CONCLUDED INVESTMENTS 01 02 NEW INVESTMENTS 03 ONGOING INVESTMENTS 7 investments concluded in 274 applications for funding in 57 ongoing investments as at 31 the period generating A$51m the period (up over 14% December 2024. of revenue for LCM, inclusive versus HY 24). of
Slide 12: HY25 Summary Profit & Loss (A$)
HY25 // SUMMARY PROFIT & LOSS (A$) HY 2025 HY 2024 CONCLUDED INVESTMENTS – PROCEEDS ON LCM CAPITAL $32.5M $18.2M CONCLUDED INVESTMENTS – PERFORMANCE FEES ON 3P CAPITAL $18.9M $10.2M CONCLUDED INVESTMENTS – LCM CAPITAL INVESTED (“COST”) ($14.0M) ($8.8M) NET REALISED GAINS FROM CONCLUDED INVESTMENTS $
Slide 13: HY25 Summary Balance Sheet (A$)
HY25 // SUMMARY BALANCE SHEET (A$) HY 2025 FY 2024 CASH $14.9M $53.0M DEBTORS $37.2M $15.0M INVESTMENTS AT FAIR VALUE $184.8M $202.9M INVESTMENTS HELD AT COST $47.4M $42.1M OTHER ASSETS $2.3M $1.5M TOTAL ASSETS $286.6M $314.4M BORROWINGS ($54.9M) ($61.9M) DEFERRED TAX LIABILITY AND TAX PAYABLE ($36.
Slide 14: HY25 Summary Cash Flow (A$M)
HY25 // SUMMARY CASH FLOW (A$M) HY 2025 HY 2024 OPENING CASH 53.0 83.0 CASH GENERATED FROM CONCLUDED INVESTMENTS 29.2 33.9 CASH INVESTED INTO ONGOING CASES (CASE FUNDING) (35.4) (15.2) OPERATING EXPENSES (9.6) (10.7) INTEREST (3.2) (5.8) DIVIDEND AND SHARE BUY BACK (7.9) (5.8) DEBT REPAYMENT (11.4)
Slide 15: Third Party Capital Outpacing Balance Sheet Capital
THIRD PARTY CAPITAL OUTPACING BALANCE SHEET CAPITAL 300 279 COMMITTED CAPITAL 725 INVESTED CAPITAL 298 NEW COMMITMENTS 700 661 300 281 250 600 270 240 228 128 500 484 413 156 200 359 210 153 176 414 181 400 180 147 337 124 150 301 150 134 83 110 300 250 227 120 98 104 116 156 46 100 104 200 90 71 60
Slide 16: Concentration Risk Receding Over Time
CONCENTRATION RISK RECEDING OVER TIME Portfolio by Invested Capital Concentration risk to reduce over time: 9% • Maturing Legacy Investments: 13 historic balance sheet funded cases were 100% funded by LCM. 9% 17% • Shift to Funds Management Model: Increasing use of third-party funds reduces sharehol
Slide 17: Losses: Risk Management
LOSSES: RISK MANAGEMENT Asymmetric risk profile Losses are not uncommon; we 200 are the same as any 180 investment business. 160 140 Within 13.5-year track record: 120 A$m 100 • 17% of investments by Capital invested 80 number have lost. 60 • 24% by invested capital 51 52 36 41 have lost. 40 • A$5.3
Slide 18: Positive Skew of Wins Comfortably Outweighs Losses
POSITIVE SKEW OF WINS COMFORTABLY OUTWEIGHS LOSSES Asymmetric risk profile • Wins far outnumber the 200 179 losses. 180 160 • Upside multiples from wins 140 (typically 2x to 4x) far 120 outweigh 1x downside from Total recovery A$m 100 88 Profit losses. 80 Capital invested 67 60 • Capture ‘big win’ p
Slide 19: Fund Management Model Enhances Operational Leverage
FUND MANAGEMENT MODEL ENHANCES OPERATIONAL LEVERAGE Asymmetric risk profile (LCM only) 35 • Positive skew is further 32 enhanced by funds model: 30 29 - Lower downside on 25 individual investments. 20 18 Total recovery A$m Profit - Higher upside when 15 14 Capital invested cases win big. 10 9 6 • Co
Slide 20: Future Cashflow Potential
FUTURE CASHFLOW POTENTIAL In-force Business Future Business 1,400 1,200 1,000 800 A$m 600 150 491 400 57 284 200 - Balance Sheet Fund 1 Fund 2 Future Co-Invest Fund 3 Fund 4 • Assume balance sheet net performance of 2.0 MOIC. • Fund I - assume Net MOIC for Investors of 2.0 (estimated gross of 2.43).
Slide 22: HY25 Outlook
HY25 // OUTLOOK 01 Fund III marketing underway. Strong investor feedback. Size expected to be similar to Fund II. 02 New commitments regaining momentum in H2. 03 US and AI strategic initiatives progressing. Significant long-term growth opportunity in the vast and nascent legal finance market. © LCM
Slide 25: The Opportunity
THE OPPORTUNITY THE LEGAL MARKET IS VAST AND OFFERS AN EXCEPTIONAL LONG-TERM GROWTH OPPORTUNITY FOR DISPUTES FINANCE… US$700 BILLION OF LEGAL REVENUES GLOBALLY 200,000+ LAWYERS WITHIN OUR EXISTING MARKET 1 MILLION+ LAWYERS IN THE UNITED STATES LESS THAN 1% PENETRATION OF DISPUTES FINANCE © LCM 2025
Slide 26: We Operate in Vast and Growing Markets
WE OPERATE IN VAST AND GROWING MARKETS UK LEGAL SERVICES SECTOR AUSTRALIAN LEGAL SERVICES SECTOR 40. 32 30. 24 REVENUE // A$BILLION REVENUE // £BILLION 20. 16 10. 8 0. 0 2017 2018 2019 2020 2021 2022 2023 2024 2017 2018 2019 2020 2021 2022 2023 2024 SOURCES // STATISTICA 2024, IBISWORLD, PROSPERANT
Slide 27: Why Invest in Disputes?
WHY INVEST IN DISPUTES? COUNTERCYCLICAL UNCORRELATED ASYMMETRICAL H ISTOR IC ALLY DISPUTE SUSTAINE D INVE STME NT TH E POTE NTIA L F OR LE VE LS R ISE DUR ING PE R FOR MANC E AC R OS S H IGH R E TUR NS F A R PE R IODS OF INSTABILITY E C ONOMIC C YC LE S A ND OUTWE IGH S TH E AND TH E LE VE L OF C ON
Slide 28: What Types of Claims Do We Invest In?
WHAT TYPES OF CLAIMS DO WE INVEST IN? 01 02 03 04 05 06 INSOLVENCY COMMERCIAL CLASS ACTIONS INTERNATIONAL ENFORCEMENT PORTFOLIOS ARBITRATION Insolvency claims include Commercial claims include Class actions include Spans multiple types of The funding of legal A growing trend for unfair preference cl
Slide 29: Return Profile
RETURN PROFILE PROFIT PER INVESTMENT (A$M)1 R O I C ( X ) P E R I N V E S T M E N T 1,2 10.0 25.0 9.0 20.0 8.0 7.0 15.0 6.0 5.0 10.0 4.0 5.0 3.0 2.0 0.0 1.0 -5.0 0.0 -1.0 -10.0 -15.0 1. PRESENTED IN ASCENDING VALUE ORDER, NOT CHRONOLOGICAL ORDER BASE D ON 13.5 YEAR TRACK RECORD, INVESTMENTS WHERE PR
Slide 30: Three-Year Running Performance
THREE-YEAR RUNNING PERFORMANCE 1 400% 45.00 3.31 41 41 3.09 40.00 300% 2.86 2.66 37 2.49 2.44 2.42 2.39 35.00 200% 33 32 31 31 30.00 28 100% 82.6% 71.1% 76.2% 65.6% 65.1% 63.8% 25.00 59.1% 49.8% 0% 20.00 FY16-18 FY17-19 FY18-20 FY19-21 FY20-22 FY21-23 FY 22-24 FY 23 - HY 25 Rolling IRR Rolling MoIC
Slide 31: Dual Sources of Capital, Dual Sources of Revenue
DUAL SOURCES OF CAPITAL, DUAL SOURCES OF REVENUE 2X FUNDS // A$650M BALANCE SHEET CAPITAL DIRECT INVESTMENTS A$142M INVESTED BALANCE SHEET CAPITAL THIRD PARTY CAPITAL A$302M COMMITTED BALANCE SHEET CAPITAL FUND MANAGEMENT A$153M INVESTED THIRD PARTY CAPITAL A$359M COMMITTED THIRD PARTY CAPITAL REVEN
Slide 32: LCM Only - Portfolio
LCM ONLY - PORTFOLIO BALANCES AS AT 31 DECEMBER 2024(A$ MILLIONS) PORTFOLIO BY PORTFOLIO BY PORTFOLIO BY CASE TYPE CASE TYPE REGION A$74M A$228 M (estimated A$ committed (number of projects) (estimated A$ capital capital) 1 commitment) 1 3 1% 1% 1% 6% DIRECT 100% CO-INVESTMENT 5 INVESTMENT2 COMMITTE
Slide 33: LCM Global Alternatives Return Fund I
LCM GLOBAL ALTERNATIVES RETURN FUND I PORTFOLIO BY PORTFOLIO BY PORTFOLIO BY GEOGRAPHY CASE TYPE CASE TYPE (estimated US$ capital BALANCES AS AT 31 DECEMBER 2024 US$150M (estimated US$ capital commitment) 2 1% (number of investments) commitment) 2 (US$ MILLIONS) EXTERNAL AUM 1 5%3% 20% 6% COMMITTED1
Slide 34: LCM Global Alternatives Return Fund II
LCM GLOBAL ALTERNATIVES RETURN FUND II PORTFOLIO BY PORTFOLIO BY PORTFOLIO BY GEOGRAPHY CASE TYPE CASE TYPE (estimated US$ capital BALANCES AS AT 31 DECEMBER 2024 US$291M (estimated US$ capital commitment) 2 4% (number of investments) commitment) 2 (A$ MILLIONS) EXTERNAL AUM 6% 3 4% 5% 3 5%1% COMMIT
Slide 35: Scaling to a Sustainable Asset Manager Model
SCALING TO A SUSTAINABLE ASSET MANAGER MODEL 9.0% 7.8% 8.0% 7.0% 6.0% 4.9% 5.0% 4.6% 4.0% 3.5% 3.5% 2.8% 3.0% 2.6% 2.0% 1.0% 0.0% FY19 FY20 FY21 FY22 FY23 FY24 HY25 Opex as % of Committed capital 2% Operating expenses as a % of Committed Capital trending lower over time © LCM 2025 // ALL RIGHTS RESE
Slide 36: Portfolio Age
PORTFOLIO AGE A$M AS AT 31 DECEMBER 2024 COMMITTED CAPITAL & AGE (A$M) INVESTED CAPITAL & AGE (A$M) COMMITTED CAPITAL A$661M INVESTED CAPITAL A$309M2 159M 70M 115M 59M 68M 21M 34M 54M 36M 27M 33M 65M 31M 41M 42M 36M 30M 14M 21 7 7 7 9 6 9M 8M 14M 3M 0 - 12 months 13 - 24 months 25 - 36 months 37 - 4
Slide 37: US Market Opportunity
US MARKET OPPORTUNITY The US accounts for around three CANADA quarters of annual global spend on ~$4BN UK litigation. ~$13BN CONTINENTAL EUROPE ASIA US market-wide new commitments of ~$21BN ~$19BN US $3bn per annum, excluding law firm ~$156BN HK AND financing. SINGAPORE ~$1.5BN Widespread use of con
Slide 38: Proprietary Technology
PROPRIETARY TECHNOLOGY ACQUIRED CUSTOM DESIGNED AND BUILT TECHNOLOGY SOLUTION INCORPORA TING BIG DATA AND ARTIFICIAL INTELLIGENCE DATA ENHANCE ORIGINATION IDENTIFY AND PRIORITISE ORIGINATION OPPORTUNITIES FACILITATES ENHANCED DECISION MAKING • Differentiate from traditional funding peers reliant on
Slide 39: Glossary
GLOSSARY Invested Capitalagain – I will means funds invested into the current portfolio of investments during the relevant period. Co-investment means LCM's direct investment into the matters funded together with the Funds, generally equal to 25% of the total capital commitment. means, in respect of
Slide 40: Important Notices and Disclaimer
IMPORTANT NOTICES AND DISCLAIMER NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND DEPENDENCIES, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), CANADA, AUSTRALIA, NEW ZEALAND, JAPAN, THE REPUBLI
Slide 41: Contact Information
CONTACT INFORMATION SYDNEY BRISBANE LONDON SINGAPORE Level 12, The Chifley Tower, Level 38, Bridge House, 1 Marina Boulevard, 2 Chifley Square, 71 Eagle Street, 181 Queen Victoria Street, Level 20-43, Sydney NSW 2000 Brisbane QLD 4000 London EC4V 4EG Singapore 018989 T // +61 2 8098 1390 T // +61 7

Litigation Capital Management — Q2 2025 Earnings Presentation on 6ix

Litigation Capital Management — Q2 2025 Earnings Presentation

Slide 1: Half Year Results Presentation 2025

Slide 2: Presenters

Slide 3: Key Messages

Slide 4: HY25 – Strategic Progress – Navigating Challenges

Slide 5: Strong Momentum in Fund Management

Slide 6: Arbitration Success – Indiana Resources

Slide 7: Arbitration Success – Green-X Metals

Slide 8: Setbacks in the Period

Slide 9: Leading Long-Term Track Record

Slide 10: Financials

Slide 11: HY25 Portfolio Progress

Slide 12: HY25 Summary Profit & Loss (A$)

Slide 13: HY25 Summary Balance Sheet (A$)

Slide 14: HY25 Summary Cash Flow (A$M)

Slide 15: Third Party Capital Outpacing Balance Sheet Capital

Slide 16: Concentration Risk Receding Over Time

Slide 17: Losses: Risk Management

Slide 18: Positive Skew of Wins Comfortably Outweighs Losses

Slide 19: Fund Management Model Enhances Operational Leverage

Slide 20: Future Cashflow Potential

Slide 21: Outlook

Slide 22: HY25 Outlook

Slide 23: Q&A

Slide 24: Appendices

Slide 25: The Opportunity

Slide 26: We Operate in Vast and Growing Markets

Slide 27: Why Invest in Disputes?

Slide 28: What Types of Claims Do We Invest In?

Slide 29: Return Profile

Slide 30: Three-Year Running Performance

Slide 31: Dual Sources of Capital, Dual Sources of Revenue

Slide 32: LCM Only - Portfolio

Slide 33: LCM Global Alternatives Return Fund I

Slide 34: LCM Global Alternatives Return Fund II

Slide 35: Scaling to a Sustainable Asset Manager Model

Slide 36: Portfolio Age

Slide 37: US Market Opportunity

Slide 38: Proprietary Technology

Slide 39: Glossary

Slide 40: Important Notices and Disclaimer

Slide 41: Contact Information