IMF Bentham Substantially De-Risks Balance Sheet and Upsizes Fund in Progressive Capital Play

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Allan Ripp | 212-262-7477 | [email protected]
Gretchen Lyn Koehler, Chief Marketing Officer | 212-488-5331 | [email protected]

Sale of the majority of its US investment portfolio to its US Fund enables company to retain substantial upside exposure to the cases while substantially de-risking its balance sheet.

NEW YORK (February 5, 2018) – IMF Bentham (ASX:IMF), the parent company of Bentham IMF (Bentham), announces today that it has just completed another progressive move in its funding and investment management strategy by selling the majority of its US investment portfolio to its US Fund.

This innovative capital markets strategy reduces the risk in its US portfolio and converts intangible assets to cash, enabling the cash to be deployed elsewhere.

“For our investors this means we have substantially de-risked our balance sheet, monetised an asset (releasing approximately US$47.8million in net cash), mitigated costs for future investments, all while retaining substantial up-side exposure to the cases sold through our participation in our US Fund. Simultaneously, IMF and Fortress1 have agreed to upsize the US Fund from US$133million to US$166.3 million.” said, Andrew Saker, IMF’s Managing Director and Chief Executive Officer.

More details:

Sale of US Investment Portfolio

IMF’s wholly owned subsidiary, Bentham, has transferred its rights in the majority of its investments in its US investment portfolio to Bentham IMF Fund 1 LLC (Fund 2) for book value plus associated investment expenses less proceeds received. IMF will receive US$57.4 million, of which IMF will have contributed US$9.6 million as its contribution to Fund 1. In addition, IMF will be entitled to 85% of the profits on these investments realised by Fund 1 after paying preferred dividends and other expenses of the fund.

Bentham will retain ownership of five investments in the US portfolio, for various case specific reasons. The retained investments total US$6.3 million in aggregated capital. No further deployments of capital are expected for these investments.

Upsizing of Fund 1

Fund 1 was structured in February 2017 with an initial US$133 million and the option to increase aggregate capital commitments up to US$200 million.

Following completion of this new Transaction, the aggregated committed and deployed capital by Fund 1 will be US$117million and US$95 million, respectively.  As part of the Transaction, Fund 1 will be upsized to US$166.3 million (with the ability to upsize further in future). The upsized Fund 1 provides additional capital for US investments without creating significant adverse deployment pressure. The additional capital of US$33.3 million will be funded 25% by IMF and 75% by Fortress.

Rationale for Transaction

This Transaction means IMF:

  • releases substantial capital while retaining upside returns associated with the Sale
  • recovers the full book value of its investments from Fund 1 (There is limited adverse cost exposure risk in the US so IMF’s primary risk was the loss of its investment. This Transaction mitigates that risk)
  • substantially de-risks its existing US portfolio
  • retains material exposure to profits realised on the Sale Investments
  • may receive earlier repayment of capital and payment of its profit share (as Fund 1’s investment realization profile is likely to be brought forward as a result of the Transaction enabling Fund 1 to repay capital to Fortress sooner, with a flow-on effect to IMF)
  • reduces its exposure to funding the remaining costs of the Sale Investments (as the costs are shared with Fortress in Fund 1)


Jeremy Sambrook
Company Secretary

1Fortress Credit Advisors LLC - see IMF ASX Announcement 13.2.2017
2See IMF ASX Announcement 13.2.2017

ABOUT BENTHAM IMF

Bentham IMF is the US arm of publicly listed IMF Bentham Limited (ASX: IMF), one of the most successful litigation funding companies in the world, with a portfolio that has a total claim size value of $3.8 billion AUD. Together, our companies have 13 offices throughout the US, UK, Australia, Canada and Asia and provide funding to clients in jurisdictions including the US, UK, Europe, Australia, Canada, New Zealand, Hong Kong and Singapore. 

We have reviewed thousands of commercial cases in the past 16 years, funding to completion more than 162 cases and generating $2.1 billion AUD in recoveries. We have achieved a 91% success rate, with clients utilizing our funding retaining an average of 62% of all case proceeds.

For further information regarding Bentham IMF and its activities, please visit www.benthamimf.com.