Throughout Omni Bridgeway Limited’s (OBL, Company, Parent) publicly available information, the following terms have the meanings detailed in this glossary which shall be updated from time to time:
|AASB||Australian Accounting Standards Board.|
|Addressable Market||OBL’s estimate of the annual amount spent by claimants on external costs of dispute resolution (excluding enforcement) that could be addressed by OBL’s litigation funding service offering.|
|Adverse cost||The cost that a losing party to litigation (in certain jurisdictions only) is required to pay to the winning party as compensation for the legal costs they have incurred in the process.|
|After the event (ATE) Insurance||Insurance cover to protect against adverse cost exposure.|
|AFSL||Australian Financial Services Licence.|
|ALFA||Association of Litigation Funders of Australia.|
|American Waterfall||The waterfall refers to the order in which investment proceeds in a fund are distributed between Fund participants. Under an American-style distribution performance fees are calculated by reference to completed investments only.|
|Americas||The geographic region of North and South America.|
|APAC||The geographic region incorporating Asia and the Pacific Region including Australia and New Zealand.|
|ASX||Australian Securities Exchange.|
|CAGR||Compound annual growth rate.|
|Committed capital / Commitments||The amount of funding that has been contracted to be provided by the Group to a litigation investment under a signed funding arrangement.|
It is equal to the total amount of capital to be provided to external parties that is either (i) committed to investments where there is a capped amount; or (ii) the estimated budgeted amount to run the investment to completion where the investment is open–ended It does not include co-funder contributions, possible overheads to be capitalised;
Unless part of the investment thesis it does not include possible adverse costs that may become payable if the underlying litigation loses. For ongoing Fund 6 investments it includes possible adverse costs that may become payable (where applicable).
Levels are reviewed and updated where necessary.
|Capital deployed||Is equal to the total external expenditure on investments.|
For completed investments it includes any net adverse costs. It does not include co-funder contributions.
|Capitalised overheads||Internal costs (including borrowing costs and direct staff costs) that are incurred in relation to Investments that are not expensed in the period they were incurred but added to the investment carrying value and recognised through the profit
and loss in line with the completion of each respective investment.|
Capitalisation occurs at the OBL and consolidation level, not within each Fund and does not affect portfolio or Fund performance, waterfall or fees.
|Completed investments / Completion|
Refers to merits investments where the underlying litigation has progressed to a state where there no further risk to the legal result as the litigation has finalisation by either settlement, judgement, or arbitrator determination, for or against the funded claimant, notwithstanding that such finalisation may be conditional upon certain matters such as court approval.
For enforcement investments completion is that the point where there is no further recovery action planned.
|Direct balance sheet||Relates to investment of the Group that are not held via a Fund.|
|CGU||Cash-generating unit which is defined as the smallest group of assets that generates largely independent cash inflows.|
|Distressed Asset Recovery Program (DARP)||A strategic program of the World Bank’s International Finance Corporation to reduce the effects of poverty in emerging markets by preventing the loss of assets and allowing access to formal credit, while helping to preserve jobs. Refer to Fund 7.|
|DRP||Dividend Reinvestment Plan.|
|ELFA||European Litigation Funders Association.|
|EMEA||The geographic region incorporating Europe, Middle East and Africa where the Group invests and offers its products and services.|
|Enforcement investment||Refers to investments where the underlying dispute has a debt &/or judicial finding that is not being honoured and requires action to be collected.|
|ESG||Environmental, social and governance.|
|EPS||Earnings per share.|
|Estimated Portfolio Value (EPV)|
OBL’s estimate of the value that may be achieved from an investment’s underlying litigation from time-to-time.
OBE Group’s EPV has been estimated on a conceptually consistent basis noting that, enforcement case investments may have a multi–layered approach from a timing and value perspective.
|EPV conversion rate||Refer to income conversion rate.|
|European Waterfall||The waterfall refers to the order in which investment proceeds in a fund are distributed between participants. Under an European-style distribution, performance fees are calculated by reference to all fund investments and not just completed investments. The manager will not participate in a portion of profits/performance fee/carry until the full amount of investor’s capital and preferred return have been fully satisfied.|
|Excluded US Person||Means a holder of Shares (or a person who seeks to be registered as a holder of Shares) whom the directors of OBL have determined (i) is a US Person who is not a Qualified Purchaser or a Knowledgeable Employee or (ii) holds or will hold Shares for the account or benefit of any US Person who is not a Qualified Purchaser or a Knowledgeable Employee|
|First Generation Fund (s)||OBL’s Fund 1, & Fund 2&3; which were established by the Group in 2017 with generally consistent terms.|
|Fourth Generation Fund||OBL’s Fund 8 as raised in 2022.|
|Fund Commitments||The amount of capital agreed to be provide to an OBL Fund from OBL and external investors.|
|Funds||Means funds, or fund like structures, that OBL manages, advises and invests into. It includes Fund 1, Fund 2&3, Fund 4, Fund 5, Fund 6, Fund 7 and Fund 8.|
|Funded investments||Refers to investments where the Group has entered an unconditional binding contract.|
|FUM /Funds under Management Commitments||The aggregate amount of Fund commitments (whether called or uncalled) for all the OBL funds that are in operation at any point in time.|
|Funds deployed||Refer to Capital deployed.|
|Fund 1||Funding structure for Litigation investments in the US established in 2017. A participation in the fund was sold in May 2023 and is now deconsolidated from the group. OBL continues to manage the Fund.|
|Funds 2&3||Funding structure for Litigation investments in the RoW established in 2017 with Fund commitments of AUD 189 million.|
|Fund 4||Funding structure for Litigation investments in the US established in 2019 with Fund commitments of USD 500 million.|
|Fund 4 (series II)||Potential Funding structure to follow-on from Fund 4 with same mandate.|
|Fund 5||Funding structure for Litigation investments in the RoW established in 2019 with Fund commitments of USD 500 million.|
The Fund commitments from external investors are in structures that are not consolidated within the Group. OBL’s 20% interest is via a parallel investing vehicle that is consolidated.
In certain disclosures we specifically include 100% of Fund 5; this approach aggregates the external investors’ interests with those of OBL to facilitate direct comparison between all Funds (as the other Funds are consolidated & hence disclosed at 100%).
|Fund 5 (series II)||Potential funding structure for Litigation investments in the RoW.|
|Fund 6||Funding structure for investments focused on EMEA purchased as part of OBE Group in 2019.|
Established in 2017 with Fund commitments of EUR 188 million
|Fund 7||A joint venture with the IFC/World Bank to facilitate DARP. Fund 7 is designed to invest in non-performing loans in the MENA region.|
Established in 2019 with Fund commitments of USD 100 million (including USD 50 million from Fund 6).
|Fund 8||Funding structure established in 2022 focused on investing up to EUR 150 million in global enforcement investments.|
|IC||Investment Committee(s) – OBL’s ultimate investment decision making bodies involving internal & external members.|
|IC approved / conditionally funded||Refers to investments that are approved by the Group’s internal investment process but have not reached an unconditional status. This may relate to the state of the funding contract, or book build, loss quantification, discovery or other evidence requirements.|
|ICC||International Chamber of Commerce.|
|IFRS||International Financial Reporting Standards.|
|ILFA||International Legal Finance Association.|
|IMF||IMF Bentham Limited and its Group, now known as OBL following a name change in 2020.|
|Implied Embedded Value (IEV)||IEV is the product of multiplying the EPV by the LTCR. IEV is formulaic calculation of the gross proceed value that may possibly be generated from the portfolio of Funded investments at any point of time based upon its EPV and the group’s
The LTCR is used for all IEV calculations notwithstanding that an EPV conversion rate of a particular fund may vary, sometimes materially from the LTCR. The smaller data set of a fund level EPV conversion rate makes that measure inherently more volatile than the global LTCR.
It is important to note that IEV is not a forecast or estimate of future income by Omni Bridgeway itself as this does not account for the structure and return arrangements of Omni Bridgeway for each fund.
IEV is instead a statement of the amount of gross proceeds which would be generated if each investment in the portfolio were to complete for an amount equal to the LTCR of the present EPV. Future performance, including the actual conversion rate realised, may exceed, or fall below historic performance of the LTCR.
|Income conversion rate||Is the rate that EPV of completed investments converts to income for any period.|
It Includes investments that fully completed in the period and the total income recognised over the investments’ life and excludes partial completions in the period.
This rate includes consideration of lost investments.
|Investment Committee (IC) (s)||Its members comprise both OBL executives and external appointees.|
|Investment commitment||Refer to committed capital/commitments.|
|Income v revenue terminology||Income, revenue and proceeds are generally used interchangeably for realised sums on litigation investments regardless of how IFRS may classify the assets and its consequential P&L disclosure.|
|Income yet to be recognised||Is the estimated value of income that may be generated from investments that are substantially complete from a litigation perspective at that point in time but have not fully satisfied revenue recognition accounting standards and our policies. It is subject to change and relates to substantially completed investments with conditional settlements or judgements on appeal which may be recognised in future periods.|
|Internal rate of return (IRR)||Is a discount rate that makes the net present value (NPV) of investment flows equal to zero in a discounted cash flow analysis. It is calculated on aggregated underlying journal entries for each completed case. Calculation includes losses
and adverse costs but excludes consideration of capitalised overheads, operating overheads, and withdrawals.|
The IRR from completed investments may vary materially over time.
By providing this historical information, OBL has not been and is not now in any way providing earnings guidance for future periods.
|Investment committed capital||Is the amount of funding that has been contracted to an investment under a signed funding arrangement.|
It is equal to the total capital either (i) committed to investments where there is a capped amount; or (ii) the estimated budgeted amount to run the case to completion of hearing where the investment is open–ended, translated to Australian dollars at the foreign exchange spot rate prevailing on the reporting date. It does not include possible overheads to be capitalised.
It does not include possible adverse costs that may become payable if a case loss. For ongoing Fund 6 investments it includes possible adverse costs that may become payable (where applicable).
Commitment levels are reviewed and updated where necessary.
|Invested capital||refer to Capital deployed|
|Knowledgeable Employee||As per the SEC’s Rule 3c-5 under the US Investment Company act of 1940, Knowledgeable Employee with respect to any Covered Company means any natural person who is: (i) An Executive Officer, director, trustee, general partner, advisory board member, or person serving in a similar capacity, of the Covered Company or an Affiliated Management Person of the Covered Company.|
|LatAm (Latin America)||The geographic region spanning Central and South America.|
|Long Term Conversion Rate (LTCR)||Is the rate of Income conversion that the group has experienced on all completed investments over its life.|
Whilst noting that past performance is not necessarily an indication of future performance, past performance indicates that the group’s litigation funding investments (excluding OBE Group investments) have generated average gross income of approximately 15% of EPV at the at the time of completion.
|LTIP||Long-Term Incentive Plan.|
|Malus and clawback event provisions||These are provisions whereby participants in the LTIP may in the event of certain specified conduct such as fraud, forfeit all or a portion of their performance rights or the resulting shares or be required to repay all or a portion of their sale proceeds from such securities.|
|Managed Investment Scheme (MIS)||An investment structure regulated under Australian Corporation Law regulations.|
|Management fees||Management fees are received for the provision of investment management services provided and are paid quarterly in arrears calculated on the net invested capital.|
|MENA||Middle East & North America.|
|Merits investment||Refers to investments where the underlying dispute involves ongoing questions about facts, damages or legal outcome and there is a risk around a judicial decision.|
|MOIC||Multiple on invested capital.|
This represents the interests of external Fund investors in funds that are consolidated within the Group, in accordance with each of the respective Funds’ return waterfall.
|OBE Group||Omni Bridgeway Holdings BV and subsidiaries; it includes Fund 6 and Fund 7.|
|OBL||Omni Bridgeway Limited (ABN 45 067 298 088).|
|OCA||OBL On-line Client Administration Proprietary Database.|
|Other costs||Includes unrecoverable due diligence costs and for Funds 2&3 and Fund 5 it additionally includes the cost of the After–the–Event insurance policy premium.|
|Performance fees||OBL is entitled to be paid a performance fee in connection with the management of each investment subject to the IRR generated. These are paid out of proceeds arising from the realisation of an investment.|
|Possible completion periods (PCP)||The possible completion period is the current estimate of the period in which an investment may finalised. It is not a projection or forecast. An investment may finalise earlier or later than the identified period for various reasons.|
For enforcement investments, it may be split across multiple possible completion periods. There are a variety of reasons for this which are all reflective of the nature of enforcement investments, for example there may be multiple underlying actions with a commensurate number of completions, or a single completion with a tranched settlement payment structure.
PCP is a dynamic concept and is subject to regular review and updating to take account of the circumstances of the underlying investment. It is to be expected that the PCP for some investments within the portfolio will be adjusted at each reporting date
PCP is not necessarily the same as anticipated IFRS income recognition period governing income recognition rules.or all investments, it may not follow that the financial result will be accounted for, nor that cash will be collected, in the year of finalisation.
|PPA||Purchase price adjustment is the adjustment in value ascribed to the investments purchased with OBE compared to their carrying cost at the time of the business combination in 2019.|
Adjustment occurs at the OBL and consolidation level, not within OBE Group and does not affect portfolio or Fund performance, waterfall or fees.
|Principle protection cover||Insurance cover to protect against risk of losing the Capital deployed to an investment.|
|Qualified Purchaser||Has the meaning given in Section 2(a)(51) of the US Investment Company Act of 1940 and the rules and regulations of the US Securities and Exchange Commission.|
|Resolution Sum||Means the total amount of any money, services, benefits and/or any in-kind assets that becomes due or is collected in accord with the underlying litigation or enforcement. It is before allowing for any amounts due to the funder, lawyers or other advisers or participants. The funder earns a share of this Resolution sum in accord with the funding arrangements.|
|Rest of world (RoW)/ non–USA||includes all regions, excluding the United States of America, in which OBL has or may have investments, LatAm.|
|Return on invested capital (ROIC)||Is the ratio of profit made above the investment cost is calculated on completed investments across their entire life (not on an annualised basis)|
Unless expressly stated to the contrary, it excludes consideration of capitalised overheads, operating overheads, and withdrawals from investments.
It is calculated as gross investment income less all total expenditure (including any adverse costs), divided by total investment expenditure (excluding any adverse costs).
|SIAC||Singapore International Arbitration Centre|
|Second Generation Fund||OBL’s Fund 4 and Fund 5 - established by the Group in 2019 with generally consistent terms.|
|Secondary market sale||A sale (in whole or part of) an existing litigation investment to another litigation investor at a point during the life of the investment before completion.|
|SPV||Special purpose vehicle|
|STIP||Short-Term Incentive Plan|
|Success rate||Refers to % of investments where the underlying litigation has completed in a manner that causes the funder to have received more that it deployed.|
|Success – legal||Refers to investments where the underlying litigation has completed to the benefit of the funded party.|
|Success – financial||Refers to investments where the underlying litigation has completed in a manner that causes the funder to have received more that it deployed.|
|TFR||Total Fixed Remuneration|
|Third Generation Fund / Purchased fund||OBL’s Fund 6 and Fund 7; which were established by OBE group and acquired as part of the 2019 acquisition of that group by IMF|
|TSR||Total shareholder return.|
|US Person||Any natural person resident in the United States is a US person according to Rule 902(k)(1)(i) of Regulation S. In C&DI 276.01, the SEC staff clarified that a person that has permanent resident status in the US (a so-called Green Card holder) is presumed to be a US resident for purposes of Regulation S.|
|Withdrawal||Refers to investments where the funder has ceased funding before the underlying litigation has completed.|
|$ weighted average||Is the average of results allowing for the respective relative AUD values of the sample inputs.|