Third-party funder unveils big losses

Brennan: considerable success over Juridica's lifetime

Brennan: considerable success over Juridica’s lifetime

Shares in third-party litigation funder Juridica plummeted today after it announced a loss of £34m for 2015.

The AIM-listed company, which announced last November that it was going into run-off because of a lack of scale, said the loss was mainly due to a change in valuation of its investments.

This was mainly caused by one particular case where a damages appeal was lost and permission to appeal to the US Supreme Court refused. However, it had already delivered gross returns of £62m on an investment of £18m.

Juridica’s shares were down nearly 20% to 42p at the time of writing.

There were 15 investments current at the end of 2015; eight involved litigation (including several which consist of multiple underlying cases), five were in either pre-litigation or a special purpose vehicle in relation to patent monetisation, one has elements of both, and one relates to revenue rights associated with a coal mine.

“A considerable portfolio of litigation remains and there are other investments that require active management in varying degrees,” Juridica told the market.

The fair value of the company’s investments at 31 December 2015 was put at £63m.

Juridica’s chairman, former Bar Council chairman Lord Brennan QC, said: “The board considers that the fund has had considerable success over its lifetime and that having been the first significant litigation funder, especially in the United States market.

“The acceptance of litigation funding as an asset class has been due in large measure to the activities of the company. The board will continue its run-off strategy in order to maximise value to shareholders.”

Juridica paid out an interim dividend of 5p per share in December, meaning it has so far returned 64p to shareholders over the life of the company, which was admitted to AIM in December 2007.

As part of the company’s wind-down, it is looking to slash costs by £625,000 in 2016, which Lord Brennan said “include significant reductions in the fees and expenses of the board”.

The interim dividend and 2015 loss meant that the net asset value per share had fallen to 77p, compared to 107p in 2014.

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