IMF’s USA result
Bentham IMF (ASX: IMF) has announced a material case settlement in the USA. It’s a result we feel validates their US expansion.
While there are limited case details at this stage (confidentiality in the US is more intense than in Australia, as the litigation funder can be deposed during a case if their identity is revealed), IMF has announced that it will receive $16 million of income from an investment of $8.4 million. This is a return on investment (before tax) of ~90 per cent in the space of 4 months, and subsequent payments may be forthcoming!
The result should not be extrapolated, particularly considering that the company has been operating in the US since 2011. But it does suggest that IMF is gaining sufficient traction in the US to begin generating returns that are comparable to its Australian operations.
At the end of the 2014 financial year, IMF’s claims book was valued at $2 billion, of which $322 million comprised matters funded in the USA. We feel confident that management can continue to grow this book to around $2.5 billion.
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David
:
They started in 2011 and have only generated results from 3 cases so far in the US. From my read, the material case settlement is only one case, albeit at a good return.
David
:
Hi Ben
I was wondering why you think their foray into the US has improved as their track record isn’t that great and what do you think of the management team of IMF?
Roger Montgomery
:
Hi David,
Can you expand on your statement, “their track record isn’t that great”?