Omni Bridgeway Ltd · ASX:OBL
Omni Bridgeway — Investor Presentation (January 2020)
46 slides from Omni Bridgeway's investor presentation, January 2020
Slide 1: Investor Presentation
Investor Presentation January 2020
Slide 2: 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, su
Slide 3: Agenda
Agenda 1 2 3 4 5 6 LEGAL FINANCIAL IMF BENTHAM OMNI BRIDGEWAY OUR COMBINED CURRENT YEAR Q&A SOLUTIONS BUSINESS DEVELOPMENTS 3
Slide 4: Legal Financial Solutions
1 2 3 4 5 6 LEGAL FINANCIAL IMF BENTHAM OMNI BRIDGEWAY OUR COMBINED CURRENT YEAR Q&A SOLUTIONS BUSINESS DEVELOPMENTS 4
Slide 5: What is litigation funding?
What is litigation funding? ▪ Specialty finance – growing rapidly as corporates embrace benefits and law firms unwilling/unable to fund litigation ▪ Non-recourse capital for commercial and class action claims ▪ Capital pays legal expenses incurred in litigation ▪ Binary outcome: Funder receives shar
Slide 6: Merits litigation funding
Merits litigation funding IMF Bentham investment funnel FY19 1. OUTLINE OF CLAIM 2. APPLICATION REVIEW 3. OFFER OF FUNDING Confidentiality agreement. Claim outlined by IMF assesses: IMF Investment Committee evaluates due diligence client or their legal representative. ▪ type and strength of case rep
Slide 7: Enforcement Funding - Investment procedures
Enforcement Funding - Investment procedures Overview Investment and engagement committee Case Case Investment Transaction Recovery sourcing analysis decision structuring and workout Continuous client and investment reporting 7
Slide 8: Enforcement Funding - Investment procedures
Enforcement Funding - Investment procedures Pre-investment due diligence The investment and engagement committee monitors the progress of prospective cases: Team Preliminary Preliminary Transaction Budgeting Client Workout and allocation recoverability merits structuring process reporting legal stra
Slide 9: Asset Recovery - Investment procedures
Asset Recovery - Investment procedures Distressed assets workout Recovery Sale Assessment of Trade Exit secondary market Settlement & Restructuring Workout Discounted or deferred payment, Amicable settlement debt swaps, debt conversions, barters Initial legal proceedings often lead to cooperative wo
Slide 10: Market potential
Market potential UNITED KINGDOM A$58.5b A$15.4b A$7.7b CANADA A$27.7b A$3.8b A$1.9b ASIA UNITED STATES A$3.9b* A$471.5b A$169.7b A$84.9b AUSTRALIA A$20.8b A$4.16b A$2.1b 2019-20 Total Estimated Addressable Markets Total Market Legal Spend Estimated Litigation Portion of Total Legal Spend Estimated T
Slide 11: Global industry momentum
Global industry momentum > US$9.5 billion AUM Regulatory liberalization – increasing effective addressable market (US alone) Third Party Funding Litigation Legislation (Hong Kong) Funder Code Administrative Insolvency practitioners IMF first publicly of Conduct Supreme Court Fostif Resolution can us
Slide 12: IMF Bentham
1 2 3 4 5 6 LEGAL FINANCIAL IMF BENTHAM OMNI BRIDGEWAY OUR COMBINED CURRENT YEAR Q&A SOLUTIONS BUSINESS DEVELOPMENTS 12
Slide 13: The big "W"
The big “W” ▪ Over the past several years we have managed two large investments in Wivenhoe and Westgem which represented both a material opportunity and a material risk given the size of the investments, the potential adverse cost exposure and the impact on profitability if these matters were won o
Slide 14: The big "W" (continued)
The big “W” (continued) ▪ IMF co-funded this investment with Innsworth on the basis that expenses and returns are shared equally and that IMF is to be paid a fee, such that, in effect, the commission is split 57.5% to IMF and 42.5% to Innsworth. ▪ In addition to external costs, given the length of t
Slide 15: The other "W"
The other “W” ▪ The Westgem proceedings were issued in 2012. The trial on liability commenced in early April 2018 and continued through to the end of June 2018. Judgment is expected momentarily. ▪ If IMF’s client succeeds at trial, there is a risk that the defendants will appeal a decision. If IMF’s
Slide 16: Common Fund Orders
Common Fund Orders ▪ The High Court handed down its decision on 4 December 2019 in what was known as the Westpac and BMW CFO appeals. The High Court by majority allowed the appeals, which effectively overruled the Appeals Court and the Court of first instance decisions to allow CFOs. ▪ The media rep
Slide 17: Common Fund Orders (continued)
Common Fund Orders (continued) ▪ IMF is uniquely positioned in the funding world with its internal infrastructure for book-building, to undertake class actions under the “opt in” model following the High Court decision. ▪ IMF will continue to explore class action opportunities on a closed class basi
Slide 18: IMF's track record
IMF’s track record (as at 30 June 2019) A$2.4b 2.6 years 89% $897m total recoveries average duration success rate IMF’s revenue A$1.5b 83 192 134% ROIC returns for funded active investments funded 2.3x MOIC claimants investments to completion 38% A$2.4b $897m total recoveries IMF’s revenue 62% $383m
Slide 19: IMF's Investment portfolio
IMF’s Investment portfolio (as at 30 September 2019) Number of investments in portfolio EPV of investments in portfolio ($ million) 90 9,000 80 8,000 70 7,000 60 6,000 50 5,000 40 4,000 30 3,000 20 2,000 10 1,000 0 0 30 June 2016 30 June 2017 30 June 2018 30 June 2019 30 September 30 June 2016 30 Ju
Slide 20: IMF's Investment portfolio
IMF’s Investment portfolio Investments1 ($ million) Portfolio EPV ($ million) Total Funds: $265m, includes investments of $0.3m in Fund 5 Total Funds: $6,715m, includes EPV of $25m in Fund 5 450.0 411.0 9,000 8,127 28.6 12.4 8,000 400.0 680 37.6 569 43.9 350.0 7,000 9.1 2,709 300.0 6,000 2,965 250.0
Slide 21: Investment portfolio – diversification by type and geography
IMF’s Investment portfolio – diversification by type and geography (as at 30 September 2019) EPV by Investment Type* EPV by Geography* 0% Appeal 42% 11% Arbitration 37% 3% 1% Commercial Asia Insolvency Australia 8% 10% Law Firm Canada 9% Multi Party EMEA Other IP United States 8% 13% Patent 22% 33%
Slide 22: Investment portfolio – balance sheet and funds
IMF’s Investment portfolio – balance sheet and funds (as at 30 September 2019) Possible completion Possible completion Possible completion Number of EPV FY2020 FY2021 FY2022 and later investments A$m A$m A$m A$m IMF balance sheet 19 1,411.8 971.8 290.0 150.0 Fund 1 32 3,045.0 901.4 1,632.7 510.9 RoW
Slide 23: Non-correlated performance
Non-correlated performance Performance in a recession Fund management model sensitive Limited debt ▪ Litigation funding one of few asset classes to economic cycles? ▪ At 30 June 2019, IMF had almost globally with returns independent of financial ▪ Capital for funds able to be raised during zero net
Slide 24: Non-correlated performance
Non-correlated performance Share price performance during a recession? Cannot predict, but: ▪ CY2008 underlying business did well, total shareholder return +54% ▪ Largely insulated from broader economic cycles ▪ Limited Exchange-Trade Fund (ETF) ownership – not materially impacted by forced ETF sell
Slide 25: Omni Bridgeway
1 2 3 4 5 6 LEGAL FINANCIAL IMF BENTHAM OMNI BRIDGEWAY OUR COMBINED CURRENT YEAR Q&A SOLUTIONS BUSINESS DEVELOPMENTS 25
Slide 26: Omni Bridgeway's track record
Omni Bridgeway’s track record Expertise and experience ▪ Founded in 1986 ▪ Un-matched experience in recoveries from (sovereign and quasi sovereign) debtors, developed in the 1990´s by funding and managing the recovery of political risk claims from the Lloyds of London insurance market >90%* success
Slide 27: Omni Bridgeway's track record
Omni Bridgeway’s track record (as at 30 September 2019) Portfolio IRR Indicators (recovery and merits funding, incl. internal costs) 155% 141% 138% Multiple (closed cases) 4.2 Tenor Weighted 4.2 2.1 (median - years) average Life (years) All closed All closed in last All closed in last and 10 years a
Slide 28: Overview of Omni Bridgeway
Overview of Omni Bridgeway Omni Bridgeway is a leading provider of funding and specialized skills for litigation / arbitration and enforcement proceedings, and for the work-out and monetization of claims and non-performing loans ▪ Leading funder of litigation, arbitration and enforcement OVERVIEW pr
Slide 29: Omni Bridgeway
Omni Bridgeway Target regions Strategy and focus ▪ Focus on funding and management of enforcement claims on a success-fee-only basis ▪ Focus on civil law litigation funding Europe ▪ Expand product portfolio to reduce idiosyncratic risks by including moving into anti-trust group claims ▪ Remain globa
Slide 30: Roland ProzessFinanz
Roland ProzessFinanz Geographic presence Strategy and focus ▪ One of the two market leaders in Germany for domestic litigation funding ▪ Primarily active in funding mid-sized claims (EUR 250k – 90% EUR 5 million) ▪ Well diversified portfolio in excess of 200 cases with a total Germany Switzerland pr
Slide 31: Distressed Asset Recovery Program (DARP) – WorldBank / IFC
Distressed Asset Recovery Program (DARP) – WorldBank / IFC Geographic presence Services ▪ Distressed Assets Recovery Program (DARP) is a joint venture project with the WorldBank / International Finance Corporation ▪ To assist banks with the funding and international legal work-out of non-performing
Slide 32: Our Combined Business
1 2 3 4 5 6 LEGAL FINANCIAL IMF BENTHAM OMNI BRIDGEWAY OUR COMBINED CURRENT YEAR Q&A SOLUTIONS BUSINESS DEVELOPMENTS 32
Slide 33: The combined IMF/Omni Bridgeway Group
The combined IMF/Omni Bridgeway Group Global leader in dispute resolution finance, financing Combined team of legal and recovery experts disputes from inception through trial, appeal, enforcement and recovery ▪ Seasoned litigators, enforcement lawyers, economists, financial experts, business ▪ Fundi
Slide 34: The combined IMF/Omni Bridgeway Group
The combined IMF/Omni Bridgeway Group IMF Bentham First First publicly listed First US Canadian Hong IMF Bentham merges litigation funder office office Singapore Kong London (ASX). Offices in (New York) with Omni Bridgeway (Toronto) office office office Perth and Sydney 148 people 18 offices 10 coun
Slide 35: Our position in the market
Our position in the market IMF Bentham / Omni Bridgeway Burford Capital Harbour Litigation Funding Therium Capital Management London Amsterdam New York Los Angeles Hong Kong Singapore Sydney Melbourne Litigation IMF Bentham + Burford Therium Harbour Longford Parabellum Augusta Woodsford Capital Omni
Slide 36: The combined IMF/Omni Bridgeway Group
The combined IMF/Omni Bridgeway Group Australia, USA, Canada, Asia, UK, Increased jurisdictional coverage Continental Europe, Middle East and Africa Countries 10 Offices 18 Investments 400+ EPV + Claims under management1 A$9.5 billion + €2.5 billion Team 148 Funds management 7 funds (~A$2.2 billion)
Slide 37: Global team
Global team IMF Bentham and Omni Bridgeway UK total: 4 (3 IM, 1 support) Continental Europe total: 40 Canada total: 9 (24 IM, 16 support) (7 IM, 2 support) 148 USA total: 23 Asia total: 7 (17 IM, 6 support) Middle East total: 4 (6 IM, 1 support) (3 IM, 1 support) Australia total: 61 (13 IM, 48 suppo
Slide 38: Fund structures
Fund structures Funds 6 and 7 Description Fund 1 Funds 2 & 3 Fund 4 Fund 5 (incl DARP JV) Fund size US$167M A$180M US$500M US$500M €195M IMF / Omni 25% 20% 20% 20% 5% contribution Market USA ROW USA ROW EMEA Type European whole of fund European whole of fund American deal by deal American deal by de
Slide 39: Funds under management
Funds under management ▪ The objectives of increasing FUM and cases include the diversification of risk, and to provide access to management fee and performance fee income. ▪ Funding is sourced from seven funds, four of which are active for new investments each with different economics and returns.
Slide 40: Current Year Developments
1 2 3 4 5 6 LEGAL FINANCIAL IMF BENTHAM OMNI BRIDGEWAY OUR COMBINED CURRENT YEAR Q&A SOLUTIONS BUSINESS DEVELOPMENTS 40
Slide 41: Developments since July 2019
Developments since 1 July 2019 Corporate funding Largest investment in our history Completions Merger with Omni Bridgeway ▪ Over 30% of portfolio ▪ US$40 million working ▪ Numerous conditional and ▪ Final element of five-year financing claims for capital investment for a unconditional completions st
Slide 42: Restructure of OTC Debt
Restructure of OTC Debt ▪ IMF has completed the process of restructuring of its OTC Debt. The original maturity date for the OTC debt was 30 June 2020 and priced at 7.4%. ▪ We completed a consent process to enable an early redemption of the OTC Debt which was supported by 83% of noteholders. ▪ We co
Slide 43: The future
The future Integration Operations | Rebrand | Multinational decision making Strategy Business plan | Human resources Footprint Team growth | Jurisdictional expansion where appropriate Technology Artificial Intelligence Growth opportunities Corporates | Strong pipelines | Global coordination Ongoing
Slide 44: Q&A
1 2 3 4 5 10 LEGAL FINANCIAL IMF BENTHAM OMNI BRIDGEWAY OUR COMBINED CURRENT YEAR Q&A SOLUTIONS BUSINESS DEVELOPMENTS 44
Slide 45: Notes to investment portfolio
Notes to investment portfolio (as at 30 September 2019) Investments Included in Portfolio Possible Completion Periods The Investment Portfolio includes investments for which the IMF Group have entered into an The possible completion period is IMF’s current estimate of the period in which an investme
Slide 46: IMF.COM.AU IMF.SG BENTHAMIMF.COM BENTHAMIMF.CA
AUSTRALIA ASIA CANADA EUROPE, MIDDLE EAST & AFRICA UNITED STATES OF AMERICA Sydney Brisbane Singapore Toronto London Geneva Dubai New York San Francisco +61 2 8223 3567 +61 7 3108 1311 +65 6622 5396 +1 416 583 5720 +44 203 968 6061 +41 (0) 22 818 6300 +971 4321 0029 +1 212 488 5331 +1 415 231 0363 L
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