IMF Bentham launches further investment vehicles, raising A$150 million to fund future investments in Australia, Asia, Canada and Europe
The new funding vehicles, “Fund 2” and “Fund 3”, are both Australian proprietary companies. Partners Capital Phoenix Fund II Limited, a fund managed by Partners Capital (https://www.partners- cap.com) will invest up to A$90 million by way of subscription for Class B Shares in Fund 2. Partners Capital is a leading outsourced investment office based in London, Boston, New York, Hong Kong and Singapore which manages over US$20 billion on behalf of endowments, foundations, investment professionals and family offices.
A special purpose vehicle advised and managed by Amitell Capital Pte Ltd, a Singapore-based private investment firm, will invest up to A$30 million by way of subscription for Class B Shares in Fund 3.
IMF has committed to invest up to A$30 million by way of subscription for Class A Shares, split between Fund 2 and Fund 3. The company will fund its capital commitment to Fund 2 and Fund 3 from its internal cash resources.
Fund 2 and Fund 3 are likely to draw down the committed capital over a three-year period, with minimum six-monthly tranches applying. Such capital will be used to invest in cases and matters in jurisdictions including Australia, Asia, Canada and Europe. Fund 1 (and any successors) will continue to have priority on funding all US cases. IMF will direct all opportunities outside of the US to Fund 2 and Fund 3 on a pro-rata basis for three years or such shorter period required to deploy the committed capital.
IMF considers this to be a significant milestone for the group which completes its medium-term capital management platform and underpins its continuing transition from exclusively managing its own balance sheet, to also being a manager of third party capital. “The funding vehicles will enable IMF to leverage its success rate and proven expertise in case selection through a larger and more diversified investment portfolio without recourse to further debt financing or dilutive equity capital,” said Andrew Saker, IMF’s Managing Director and Chief Executive Officer.
IMF has secured for the benefit of Fund 2 and Fund 3 a world-first After-the-Event insurance policy, that will respond to claims for adverse costs over the excess of A$7.5 million. Fund 2 and Fund 3 will proportionately meet the costs of the policy, which are approximately A$12.5 million.
The policy is provided by an ‘A’ rated insurer, and will cover adverse costs of A$30 million over the excess. IMF is of the view that this policy, combined with the fund structure and assuming a level of performance in line with its historic record, will insulate IMF from claims for adverse costs that will expose its own balance sheet for investments in Fund 2 and Fund 3. The policy will enable IMF to fully deploy all funds, after the payment of the premium, for investments, rather than needing to retain cash for potential adverse cost exposure.
“The launch of the funding vehicles reflects again the market’s perception of IMF,” said Mr. Saker. “Together with the US Fund, and bonds issued in April 2016 and April 2017, we have raised close to A$480 million for investing. IMF’s history of success, its strength of its procedures and policies, and its people, made these achievements possible,” added Mr. Saker.
To June 30, 2017, IMF has commenced and completed 162 cases since inception in 2001, that have produced a ROIC of 1.6x, a success rate of 91% and an average investment period of 2.6 years. Over the past 6 years to June 30, 2017 on non-US matters, IMF has achieved an average IRR of 62%, ROIC of 1.5x, and an average investment period of 3.0 years.
About Bentham IMF
Bentham IMF is the US arm of publicly listed IMF Bentham Limited (ASX: IMF), one of the most successful litigation funding companies in the world, with a portfolio that has a total claim size value of $3.8 billion AUD. Together, our companies have 11 offices throughout the US, Australia, Canada and Asia and provide funding to clients in jurisdictions including the US, Australia, Canada, New Zealand, Hong Kong and Singapore.
Allan Ripp | 212-262-7477 | [email protected]