- Arbitration investment realises 1,291 per cent return on invested capital
- LCM makes A$29.7mn gross profit from investment
Litigation Capital Management (LIT: 82.5p), a provider of litigation financing, has made an eye-watering return on a directly funded arbitration investment.
For good measure, LCM’s first Global Alternative Returns Fund (GARF) invested in the case, too, good news for shareholders as LCM has also earned a A$15.1mn performance fee. LCM receives 25 per cent of profit on each fund investment over a soft hurdle rate of 8 per cent and earns an outperformance return fee of 35 per cent over an internal rate of return (IRR) of 20 per cent, thus providing an attractive income stream to complement realisations from its own directly held portfolio.