Ishikawa: Foresight is more suitable partner
Listed legal business RBG Holdings has sold its litigation funding arm for up to £3.1m, having last year had to write off £4m after two of the cases it invested in were lost.
LionFish Litigation Finance has been acquired by Blackmead Infrastructure, which in turn is owned by Averon Park. Foresight Group – which has previously co-invested with LionFish – is the manager of Averon Park’s investments.
It is paying £1.1m upfront, which will be used to repay an intercompany loan, with a further sum of up to £2m subject to performance conditions. This will be used to repay additional intercompany debt.
Blackmead is acquiring four of the eight live investments within LionFish with a net asset value of £4.1m and thereby discharging RBG from ongoing funding commitments, which are currently estimated to be £2.6m.
The four investments RBG is retaining are fully funded with an asset value of £2.23m. As a result, the group will report a non-cash loss on the disposal of just under £1m.
Investors in RBG – which owns the law firms Rosenblatt and Memery Crystal – were told that the further payments were subject to the successful outcome of the four cases being acquired.
“The level of payout is dependent on the return generated by each case and subject to a waterfall whereby Blackmead, as principal risk taker, will be paid a preferential amount upon successful outcome.”
RBG said the proceeds would be used for working capital purposes and to reduce net debt.
Last year, in the wake of the write-off, RBG talked about refocusing the group on its main professional services business.
RBG chief executive Jon Divers said: “Having agreed that LionFish would be better placed in a dedicated asset management business, we are pleased to have completed this disposal.
“We have delivered cash back to the group, reduced our net debt, with the potential to receive additional cash depending on LionFish’s future performance.
“Our focus is now on driving organic growth from our established legal businesses, Rosenblatt and Memery Crystal, and our M&A business, Convex Capital, which has a growing pipeline of potential opportunities.”
Foresight is a listed alternative asset investment manager and entered a co-investment arrangement with Foresight in February 2022.
It said the acquisition would provide LionFish with “the stability and support to leverage its team, its principal investment model, and its operational efficiency”.
Operationally, LionFish will remain an independent company run by management team Tets Ishikawa and Tanya Lansky, with general oversight from a newly appointed board.
Mr Ishikawa, managing director of LionFish, said: “We would like to thank RBG Holdings PLC for their support in launching LionFish. Although we had originally envisaged the partnership to last for many years, the lessons we learnt together and RBG’s decision to refocus on professional services has given us the opportunity to find a more suitable, long-term and exciting partner.”
Oliver Bates, senior private debt manager at Foresight, added: “We have followed the litigation finance market for several years and we have always been impressed by LionFish’s model and commercial approach.
“Having followed it closely over the last couple of years, it was always clear to us that Foresight could provide a stronger platform on which LionFish could fulfil its true potential.”
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