Litigation Capital Management (LCM) (LSE:LIT) has disclosed a recent High Court ruling against one of its funded clients in a commercial litigation case, resulting in a £5.0 million investment write-down. The company is currently assessing the judgment and exploring possible responses. Alongside this, LCM provided a trading update revealing modest cash realisations during the second half of the fiscal year and a notable rise in net debt to A$73 million.
Due to ongoing uncertainty in the US litigation finance environment and related political factors, LCM has decided to suspend active marketing efforts for its Fund III, with plans to recommence fundraising activities in late 2025 or early 2026. Despite the recent trial loss, LCM remains confident in the underlying strength of the dispute finance market and its distinctive business model.
Financially, LCM faces headwinds from declining revenues that have affected growth projections. Technical indicators reflect bearish momentum, while valuation concerns persist, highlighted by a negative price-to-earnings ratio, even though the company offers a reasonable dividend yield. The recent legal setback weighs on market sentiment but does not significantly impact the overall portfolio’s performance.
About Litigation Capital Management
Litigation Capital Management (LCM) is an alternative asset manager specializing in global dispute finance. The firm operates through two main channels: direct investments from its permanent capital and third-party fund management. Its investment approach includes single-case funding, portfolio funding, and acquiring legal claims. Revenue streams come from direct investment returns and asset management performance fees. Headquartered in Sydney, LCM also maintains offices in London, Singapore, and Brisbane, and trades on AIM under the ticker LIT.
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