Omni Bridgeway Ltd · ASX:OBL
Omni Bridgeway — Investor Presentation (December 2017)
30 slides from Omni Bridgeway's investor presentation, Dec 6, 2017
Slide 1: Investor Presentation 6 December 2017
For personal use only INVESTOR PRESENTATION 6 December 2017
Slide 2: Global
GLOBAL For personal use only Andrew Saker Chief Executive
Slide 3: What is litigation funding?
WHAT IS LITIGATION FUNDING? For personal use only As a “litigation funder” IMF provides funding on a contingency basis to businesses and individuals with claims for loss and damage. IMF provides funding for the client’s case or to the client and, in jurisdictions where adverse costs are relevant
Slide 4: Litigation funding market
LITIGATION FUNDING MARKET There is currently no direct empirical data available on the size of the litigation funding market in any For personal use only market in which IMF operates. The following estimates have been calculated by reference to third party research reports on legal services mark
Slide 5: IMF's competitors
IMF’S COMPETITORS In Australia it is estimated that IMF has 65.8% of the litigation funding market. (ref : IBIS 2017) For personal use only The key industry participants in the markets in which IMF operates include: Australia US Europe/Asia JKL/Longford Capital Burford Harbour Litigation Lending S
Slide 6: Overview of IMF Bentham Limited
OVERVIEW OF IMF BENTHAM LIMITED IMF has delivered a global ROIC of 1.6x since listing on the ASX in 2001. IMF is continuing to execute its growth strategy For personal use only including international expansion, diversification and capital management. IMF Fast Facts Detail A leading global litigatio
Slide 7: IMF's track record of success
IMF’s TRACK RECORD OF SUCCESS For personal use only Revenue Summary Revenue to funded claimants $1,310M 62% Revenue to IMF: 128 133 Reimbursement of costs $306M 15% Net income (excluding overheads) $486M 23% IMF total revenue $792M 38% Total revenue generated $2,102M 100% 14 14 15 Completions by Reg
Slide 8: Cases and commitments
CASES AND COMMITMENTS For personal use only Growth derived from: Increase in number of Investment Managers. Maturing offices in US, Canada and Singapore. Launch of new product offerings for corporates and insolvency. Increased targets for funding for Investment Managers. 8
Slide 9: Investment portfolio at September 2017
INVESTMENT PORTFOLIO AT 30 SEPTEMBER 2017 For personal use only Increase in number of cases currently funded to 70 matters. Increase in estimated portfolio value to $4 billion. Increase in investment in cases represented by intangible asset value of $195 million. 9
Slide 10: IMF capital plans
IMF CAPITAL PLANS For personal use only IMF has now launched a US and RoW fund to fund all new matters from 2017 for the next three years (or until fully deployed). The funds, together with the issue of bonds in 2016 and 2017, have provided IMF with access to approximately $480 million in funds
Slide 11: Enhanced risk management
ENHANCED RISK MANAGEMENT For personal use only IMF’s risk management process includes Case selection, Investment Committee review, and Case Management. Case selection must meet minimum legal, factual and commercial criteria before recommendation to the Investment Committee. Rigorous Investment
Slide 12: Growth strategy
GROWTH STRATEGY IMF has identified significant opportunities for growth and risk diversification. For personal use only Item Opportunity Major domestic growth Renewed focus on the insolvency market and corporate funding. opportunities Potential opportunities with common fund orders with open cla
Slide 13: Key risks - IMF
KEY RISKS - IMF Item Description For personal use only Investments in cases which are If a funded case is lost, IMF will lose not only its investment but may, in jurisdictions in which the lost “loser pays” rule applies have to pay the defendant’s costs. Portfolio concentration risk IMF’s financ
Slide 14: United States
UNITED STATES For personal use only Charlie Gollow Chief Executive USA
Slide 15: US business background
US BUSINESS BACKGROUND For personal use only Established in 2011. Four offices in New York, Los Angeles, San Francisco and Houston. Staffed by a mixture of US senior and mid-range experienced attorneys. Funded 59 matters since inception (14 in fund). 15
Slide 16: US and AU markets compared
US AND AU MARKETS COMPARED No Issue United States Australia For personal use only 1. Legal system Common law based with separately developed federal and Common law based with separately developed federal and state law and procedural systems. 1.2M lawyers. state law and procedural systems. 65K lawyer
Slide 17: US funding products
US FUNDING PRODUCTS For personal use only Claimant Funding Single cases – fees & costs Working capital Monetizing appeals & whistleblower awards Case types Commercial cases & complex business disputes Trade secret theft Anti-trust Bankruptcy (insolvency) Copyright/trademark/paten
Slide 18: US baseline funding model
US BASELINE FUNDING MODEL For personal use only Bentham IMF Invests 50% of 20% Fee Budget Recovery Claimant Litigation Claimant receives 60% Recovery 50% of Legal 20% Fee Budget Contingency Fee Law Firm 18
Slide 19: Portfolio funding
PORTFOLIO FUNDING For personal use only Plaintiff Case Plaintiff Case Plaintiff Case Invests Hours Contingency Fees Law Firm Time-Based Invests Capital Multiple Return Bentham IMF 19
Slide 20: US competitors
US COMPETITORS For personal use only Contingency lawyers Commercial funders Burford Longford Lake Whillans Parabellum Brickell, Woodsford, Therium, Themis, Vannin Multi-strategy funds (Jefferies, Elliott, DE Shaw) Ad hoc investors Consumer funders 20
Slide 21: Specific US risks
SPECIFIC US RISKS For personal use only Growing competition Significant influx of capital US Chamber of Commerce Mandatory disclosure (Civil Rules Committee) Senate Judiciary Committee Appropriations Bills 21
Slide 22: Financials
FINANCIALS For personal use only Julia Yetsenga Chief Financial Officer
Slide 23: Investment portfolio at September 2017
INVESTMENT PORTFOLIO AT 30 SEPTEMBER 2017 Australia and Asia – Estimated Portfolio Value For personal use only Possible Possible Possible Number of EPV completion completion completion EPV Range cases $M FY2018 FY2019 FY2020 and later $M $M $M Less than $50M 18 363.2 165.0 116.2 82.0 Greater than $5
Slide 24: Investment portfolio at September 2017 - notes
INVESTMENT PORTFOLIO AT 30 SEPTEMBER 2017 Notes to the Group’s Case Investment Portfolio For personal use only Past Performance Past performance is not necessarily an indication of future performance. Both the Long Term Conversion Rate and IMF’s global and US ROIC may vary materially over time. By p
Slide 25: IMF's track record of success
IMF’s TRACK RECORD OF SUCCESS Revenue Summary For personal use only Revenue to funded claimants $1,310M 62% Revenue to IMF: Reimbursement of costs (40%) $306M 15% Net income (excluding overheads) (60%) $486M 23% 128 IMF total revenue (100%) $792M 38% 133 Total revenue generated $2,102M 100% 14 14 15
Slide 26: US fund economics and hypothetical investment
US FUND ECONOMICS AND HYPOTHETICAL INVESTMENT For personal use only IMF’s US Fund provides an opportunity for IMF to considerably enhance its risk adjusted returns via non- recourse equity finance. Key fund dynamics: Investor IMF Total IMF US Fund Total capital commitments of USD133m with mutu
Slide 27: US fund hypothetical example - accounting
US FUND HYPOTHETICAL EXAMPLE - ACCOUNTING Stage 1 Stage 2 Stage 3 For personal use only Distribution from Invest in Matter Matter complete Fund & pay tax US IMF US IMF US IMF US Fund - Example (ROIC 1.2x) Fund Group Fund Group Fund Group Income Statement Litigation revenue 11.0 11.0 11.0 11.0 Litiga
Slide 28: RoW fund economics and hypothetical investment
RoW FUND ECONOMICS AND HYPOTHETICAL INVESTMENT For personal use only IMF’s RoW Fund, coupled with the ATE cover, provides an opportunity for IMF to fully deploy the fund in a risk managed, non-recourse leveraged equity structure. Key fund dynamics: Investors IMF Total IMF RoW Fund Total capita
Slide 29: RoW fund hypothetical example - accounting
RoW FUND HYPOTHETICAL EXAMPLE - ACCOUNTING Stage 1 Stage 2 Stage 3 Step 2 - Matter Step 3- Distribution For personal use only Invest in Matter complete from Fund & pay tax ROW IMF ROW IMF ROW IMF ROW Fund - Example (ROIC 1.5x) Fund Group Fund Group Fund Group Income Statement Litigation revenue 12.5
Slide 30: IMF sources and uses of funds
IMF SOURCES AND USES OF FUNDS For personal use only FY2017 Cash flow $'m Cash flows from operating activities Payments to suppliers and employees (35) Interest income 3 Interest paid (7) Income tax paid (12) Net cash flows (used in) operating activities (51) Proceeds from litigation funding - settle
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