Specialist insolvency litigation funder set to list amid growing demand for capital

Cooklin: Funding gaining greater acceptance in the wider litigation world

Specialist third-party funder Manolete Partners is planning to float on the London Stock Exchange so as to satisfy increasing demand for third-party funding from insolvency practitioners (IPs) here and abroad, its chief executive said today.

Following the path of Burford Capital and Juridica, the aim is to go public between September and December in a move that could value company at around £100m.

It has invested in more than 220 cases since its creation in 2009, completing 160 – it took six years to reach 100 cases and then just two years to hit 200. The company claims a 100% success rate for cases that have gone to trial and a 94% rate overall.

Manolete always assumes the entire risk of the case and never asks solicitors to act on a contingent basis.

Steven Cooklin told Litigation Futures that Manolete was getting through £10m in expansion financing agreed with HSBC in January “pretty quickly” due to “record levels” of demand for capital.

Though the company has specialised in insolvency from the start, he indicated that it would in time look to broaden out into other areas of litigation; however, the initial focus would be international expansion for insolvency funding.

In April 2016, the government ended the exemption for insolvency litigation from LASPO’s abolition of recoverable success fees and insurance premiums in conditional fee cases.

Mr Cooklin said this had helped considerably, as regulators changed their guidance to recommend that IPs use third-party funding instead of conditional fee agreements.

An accountant by background and a former director of HSBC Investment Bank, Mr Cooklin owns 32% of the business and co-founder Michael Faulkner – CEO of asset manager River & Mercantile plc – 24%.

Well-known private equity investor Jon Moulton, who has invested in Manolete five time, has 40%, with the remaining 4% held by staff.

Mr Cooklin acknowledged the role of Burford Capital – which set up around the same time at Manolete – in educating investors about third-party.

“Our funding offerings are specifically tailored for the unique demands of insolvency claims,” he added. “Third-party funding also appears to be gaining greater acceptance in the wider litigation world, but the dynamics are different and I suspect adverse selection must continue to be an issue.”

At the same time, Manolete claims that every IP it has worked with has always returned with further cases.

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