Third-party litigation funder Vannin Capital has announced its intention to float on the London Stock Exchange next month.
The existing shareholders are to make 25% of its stock available in a bid to raise £70m.
The company has also announced former Allen & Overy senior partner David Morley as its chairman.
Vannin told potential investors that, since 2013, it has achieved returns of 2.8x on concluded funding commitments, winning 88% of its claims.
In all, since launching in 2010, Vannin has funded 70 cases, with an aggregate funding commitment value of £164m. It said it now receives more than 50 leads a month.
Going against the grain of how the market has moved in recent times, Vannin continues to focus primarily on single case funding, “where it believes there is the greatest potential to deliver higher returns”, and estimates that it has up to 15% of that market.
As of 30 June 2018, the group had £103m in live commitments, of which 91% was dedicated to single cases.
The proceeds of the float will be used to repay in full a £27m shareholder loan by a company owned by Isle of Man-based Dan Craddock, the entrepreneur whose private office has largely funded Vannin until now.
Existing shareholders and certain members of the group’s senior management will also see “a partial realisation of their investment”.
The rest would be used to expand into Singapore and Hong Kong, followed by additional offices in US legal hubs, broaden Vannin’s capabilities in commercial arbitration and investment treaty work, and increase its headcount generally.
“The group believes there is opportunity to expand its product offering into complementary product areas, such as expanding the provision of portfolio funding, as well as to develop direct funding agreements with large corporate clients.”
Vannin currently has offices in London, Paris, Sydney, Melbourne, New York and Bonn.
The pipeline of potential new funding commitments currently stands at £90m, of which £30m has been approved by the company’s funding committee.
Vannin said that between April 2018 and December 2020, it expected to sign off at least £300m of new funding commitments.
For the years ended 30 September 2015 to 2017, the company’s income increased at a compound annual growth rate of 42% to £36.5m, operating profit increased at a rate of 32% to £28m and profit after tax increased to £21m at a rate of 22%.
Chief executive Richard Hextall said: “The IPO strengthens our capital position and enhances our profile. This will accelerate further growth and consolidate our position as a leading global player.”
Mr Craddock, who has until now been Vannin’s chairman, becomes deputy chairman with the appointment of Mr Morley.
Mr Craddock said: “His appointment underscores Vannin’s strategic intent and continues the strengthening of the senior team’s ability to deliver its ambitious, sustainable growth strategy.”
Mr Morley said: “An evolving market landscape and growing demand for dispute funding provides a robust opportunity for strong and sustained growth, for which Vannin Capital is well positioned.”