Augusta raises £250m in capital as new insolvency funder makes bow

Meehan: Return capped

Litigation funder Augusta Ventures has raised £250m in new capital to “rapidly expand” its portfolio of cases.

The company now has £585m of assets under management and said this would enable it to fund “an unprecedented pipeline of opportunities in high value litigation and dispute scenarios”.

Augusta has 42 staff across London, Sydney and Toronto and, since its launch in 2013, has made over 240 investments in disputes.

The fundraising, which was oversubscribed, was supported by Beach Point Capital Management, the anchor investor in the previous funding round, and two new investors, US-based alternative investment manager Magnetar Capital, the anchor in this funding, and global investment firm Northleaf Capital Partners.

Augusta chief executive Louis Young said the company had “never seen so many strong opportunities” for funding.

He continued: “It is particularly satisfying to see both the continued support of existing investors as well as the addition of two new institutions who have deep experience in the sector.

“This validates the quality of our investment platform and the amount of the new commitments reflects the depth of the investment pipeline.”

Hitesh Patel, Augusta’s non-executive chairman, added: “Augusta’s largest capital raising initiative signals its intention to rapidly expand its portfolio of investors and funding cases.”

Meanwhile, private equity and special situations institutional investor Sandton Capital Partners has launched Tresartis, a new litigation funding platform focused on the insolvency market.

It forms part of the IP Unlock offering, which as reported last week on Legal Futures aims to support insolvency practitioners (IPs) dealing with the disposal of distressed consumer law firms.

London-based Tresartis has no set preference as to whether it funds or buys a claim, or how adverse costs risks should be addressed.

Ideal investment size ranges from £100,000 to £1m, which Matt Meehan, head of Sandton UK, said was the “most interesting niche”. He explained that there was “too much money chasing after the really big deals”.

He said a key feature that would distinguish the Tresartis offering from other insolvency funding was a pricing model that capped its return, and the ability to “move really quickly”.

Its external counsel is Justina Stewart of Outer Temple Chambers, who said Tresartis’s entry to the market provided more competition and options for IPs. She said: “Having worked with Sandton for some time, I have been struck by their collaborative, transparent, flexible and commercial approach.”

Mr Meehan added that Sandton’s “core business” was buying companies out of insolvency and so it was already well connected with IPs.

In other news, AIM-listed funder Litigation Capital Management has entered into a litigation finance agreement with certain Carillion entities (which are in liquidation) to fund a £250m claim against the group’s former auditors, KPMG.

The claim relates to KPMG’s conduct of its audits of the group’s financial statements.

Carillion was the largest corporate collapse in the building and construction industry in UK history.

Nick Rowles-Davies, executive vice-chairman of LCM, said the deal strengthened its position in the insolvency market. “We are delighted to be supporting thousands of creditors who have suffered as a consequence of the biggest insolvency in recent UK history.”

Finally, UK-based funder Woodsford has become the first overseas funder licensed by the Australian Securities Investment Commission to fund class actions in Australia as managed investment schemes under new regulations which came into effect last year.

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