There is “strong interest” from investors in third-party litigation funding, according to Therium Capital Management’s parent company.
An interim management statement from investment company City of London Group plc (COLG), covering the period from 1 April 2012, said Therium has raised £14.9m in all to cover around 20 investments.
The statement said that following the award In April of Therium’s first institutional mandate – for £5m, with a stated intention to increase the fund to £15m – “there has been strong interest in this non-correlated asset category from a range of potential investors and consequently the outlook for further third-party funding looks very promising.
“The pipeline of legal cases coming to Therium for funding remains strong with over 325 cases reviewed to date, of which approximately 6% have been funded. There have been no significant developments on legal cases in this period and accordingly there have been no performance fees during this period but the outlook for the portfolio of cases is encouraging.”
COLG also reported that its subsidiary Novitas Futures Ltd, which lends to law firm clients in litigation, “has developed a good track record but continues to search for third-party funding to enable its growth”.
COLG chief executive Eric Anstee said: “The activity in this period clearly demonstrates increased momentum on third-party funding for our platforms despite the challenging economic conditions. Each of our platforms is moving towards critical mass and this has laid the foundation for future growth…
“We are continuing to look to reduce our holdings in our other investments to redeploy the capital in line with our strategy.”
COLG’s strategy is to build a financial services group centred on specialist financing and alternative fund management. It says there are particular opportunities in the SME and professional services sectors as major national and foreign banks limit new lending to these borrowers.
It also owns Professions Funding Limited, which provides asset backed finance and working capital loans to professional practice firms.