Litigation Capital Management Issues
Litigation funding is a risky business and major funder, Litigation Capital Management raised more than a few eyebrows on June 19, 2025, when the company (traded as LIT:33p) issued a rather gloomy pre-close update. So what’s been happening to the alternative asset management company with its focus on litigation and dispute funding deals?
The shares in the company have slumped dramatically following the loss of a major case in London. The High Court in London ruled against LCM’s client in a commercial dispute where LCM had committed £3.4 million of its capital to the case, with a further £8.2 million from investors in one of its funds.
The position was marked at £5 million on the balance sheet as of December. Adverse costs are covered by insurance, and the company is considering its next steps.
1. Earnings Cuts & Bumpy Trading
LCM dialed down its full-year earnings outlook, according to a report in Investors Chronicle. In H1, they pulled off A$52 million in returns from A$14 million deployed, which was quite solid but no so much in H2 when only A$3 million in returns from an equal spend across four cases, half of which failed.
Overall, that brings the total to A$55 million across 13 cases—about a 2.9x.
2. Fundraising Reset
They company has paused hard on launching their third fund, which has raised eyebrows and some concerns.
LCM isn’t relying solely on its own balance sheet anymore. They’re leaning into asset management—raising third-party funds, which spreads risk and reduces capital strain.
3. Discounted Valuation
Shares are trading at roughly half book value, which usually gets investors curious. Thompson’s takeaway? If there’s a rebound, there could be room to run for the company.
Funding cases isn’t linear. High-rise returns in one deal can be offset by no-goes in another, which is the nature of the litigation funding beast. LCM, with offices in the UK, Australia and Singapore has high hopes of expanding its coverage geographically and financially, but recent court results have cast a shadow over the company’s efforts.
