10 November 2016Print This Post

Calunius closes £100m fund as IMF and Bentham go their separate ways

Walker: new Bentham Europe director

Walker: new Bentham Europe director

Third-party litigation funder Calunius Capital has closed its third fund at a total of £100m of capital, meaning it now advises funds exceeding £200m that invest in large-scale commercial litigation and arbitration.

The investors in Calunius Fund 3 were the same ones who backed its Fund 2, indicating their continuing confidence in the company and litigation funding more generally.

Managing partner Mark Wells said: “Since Calunius’s creation in 2006, we have worked to take litigation finance beyond its roots of funding access to justice for impecunious commercial entities. So it is gratifying that now, 10 years on, we regularly see CFOs and GCs of the world’s most solvent companies make rational, commercial use of litigation funding to reduce or eradicate the major financial risks involved in complex litigation and arbitration.

“Beyond case funding, owners of contingent litigation assets are increasingly seeing litigation funding as a way to unlock the value of those assets through whole or partial monetisation, and using the proceeds to fund execution of awards, corporate costs or other unrelated projects.”

Recently, Calunius-backed Rusoro Mining was awarded more than $1.2bn in an ICSID arbitration following a four-year dispute. ICSID is the International Centre for the Settlement of Investment Disputes.

Mr Wells added: “As understanding of our business improves across our markets, we have found ever larger requirements in terms of the amount of capital needed. Working as we are with investors who know us intimately, we are able to use syndication and co-investment strategies that enable us simply to say that no deal is ever too big.”

In other recent third-party funding news, the joint venture that created London-based IMF Bentham Europe has come to an end, with IMF Bentham, the leading listed Australian funder, selling its 50% stake to its former partner and recording a A$4m profit. It created IMF Bentham Europe in March 2014 with US hedge funds.

The Australian funder said in its recent annual report: “In participating in the joint venture, IMF was seeking to mitigate the risk and costs of operating in Europe. After two years of operation it became apparent that an actively participating joint venture partner did not fit well with the IMF business model. The sale resulted from a joint venture deadlock sale mechanism and in no way reflects IMF’s view on the European market.

“Achieving a sensible termination of the joint venture was an important and positive development for IMF. IMF is restricted from competing in parts of Europe for a period of 12 months ending in July 2017, after which IMF will consider re-entering the market.

As a result of the termination, IMF no longer has an interest in the Tesco shareholder action and Volkswagen emission cases that what is now Bentham Europe is funding, but it remains involved in other current cases, subject to some indemnity from its former joint venture partner.

Separately, Australian funding pioneer John Walker – who founded IMF but left at the start of this year – has joined the board of Bentham Europe.

Jim Devine, Bentham Europe’s chairman, said: “John’s near 20-year experience in the litigation funding business and his past close involvement with Bentham Europe means that he will make significant contribution to the company’s business going forward. With the recent dissolution of our joint venture with IMF Bentham, John’s future involvement will also provide valuable continuity to that business.”

Mr Walker has also launched Investor Claim Partner (ICP), described as a “world-first advisory service that will act for institutional shareholders (eg retail and wholesale managed funds and superannuation funds) wanting to initiate legal claims against ASX-listed companies that have committed corporate wrongdoing leading to shareholder losses”.

It is already involved in shareholder actions being mooted against listed Australian law firms Slater & Gordon (the second such action, with one not involving ICP having already been issued) and Shine Lawyers.

In a statement, ICP said: “The unique ICP advisory model is expected to significantly reduce the cost and time involved in pursuing shareholder legal claims. For example, John Walker sees potential to introduce greater pricing competition among litigation funders and law firms running class actions, thereby ensuring a greater share of funds awarded at settlement or judgment go to shareholders.”

A spokesman said Mr Walker had no immediate plans to offer the service in the UK, but he was not ruling out in the future.

Finally, Vannin Capital has appointed Howard Sharp QC as a non-executive director. The Solicitor-General of Jersey for five years until July 2015, Mr Sharp is the founder of Ardent Chambers in Jersey.

By Neil Rose


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