11 October 2012
Top private equity investor puts money into litigation funder
Moulton: impressed by business model
Top private equity investor Jon Moulton has become a “significant minority equity shareholder” in insolvency litigation funder Manolete Partners PLC after completing a personal investment in the company.
John Jarvis, from Mr Moulton’s family office, will join the Manolete board, sitting alongside the company’s co-founder and CEO Steven Cooklin and Mike Faulkner, the co-founder and CEO of P-Solve, part of the Punter Southall Group, which is a long-standing investor in Manolete.
Mr Moulton is currently chairman of Better Capital – whose recent investments include fashion retailer Jaeger and windows company Everest – and the former managing partner of Alchemy Partners.
He said: “I have been greatly impressed by the Manolete business model and its management team. I know the UK rescue and recovery market very well and Manolete’s products significantly add to insolvency practitioners’ ability to maximise creditor returns.”
Mr Cooklin added: “We are delighted to have attracted investment from someone of the calibre of Jon Moulton. His knowledge and experience of the UK recovery market mark him as a genuine ‘value-added’ investor and his support provides us with an excellent platform to continue the rapid expansion of the business.”
The Manolete model is not simply to provide funding to the insolvency practitioner; instead it buys claims outright for cash, pursuing them in its own name and then returning a substantial share of the proceeds back to the creditors of the insolvent company. Manolete makes its return by retaining a residual share of the proceeds.
The company said its products have appealed across the entire spectrum of the UK insolvency and recovery market, purchasing cases from the very largest accountancy groups, such as PwC, PKF and RSM Tenon, through to smaller insolvency and recovery focused boutiques such as Wilson Field, Carter Clark and Leonard Curtis. The cases range from large multi-million pound claims, such as a major compensation claim under the Buildings Act against a borough council that went to trial in the London Technology and Construction Court earlier this year, through to smaller £30,000-£50,000 claims against individual directors who have wrongfully extracted funds from their companies in the lead up to insolvency.
Manolete claimed that it has a “particularly impressive track record against these so-called dodgy directors – often recovering the entire debt owed to the company within just a few months of buying the claim and having expended minimal sums on legal costs”.