OBL - Omni Bridgeway

Ves said:

Any thoughts on the legislation risk for this stock? There were rumblings from the Senate (inquiry announced at the time, but I can't find it) and Productivity Commission recommendations early in 2015. But can't find anything since.

Here's a blog post from a court justice in Victoria written in March 2015 that summarises the state of play and potential changes:

http://www.supremecourt.vic.gov.au/...nding+in+class+actions+should+it+be+regulated

Capital adequacy, changes to contingent fee prohibition and caps on percentage of proceeds receivable by firms are all probably detrimental to IMF Bentham and friends in varying degrees.

Click to expand...

There;s this from the Productivity Commission, which you've mentioned:
http://www.pc.gov.au/inquiries/completed/access-justice/report/access-justice-overview.pdf

I couldn't find much in the way of contingent fee caps, but the capital adequacy components should be a net positive.
Whilst it forces the litigation funder to maintain sufficient levels of capital, it would definitely drive out smaller players.

There were also rumblings about an increase in frivolous lawsuits as a result of litigation funding, but this really makes no sense, and the PC didn't agree with it either. On page 22 of that report:

...the evidence that there has been an increase in unmeritorious claims is weak and concerns do not appear to relate to the activity of litigation funders, but to the underlying laws and rights to which they facilitate access

Click to expand...

In addition to all this, check out the JustKapital write up here.
I should mention I do have a small position in JKL, but no other link to the research whatsoever. Still, a decent read.


EDIT: Thanks Robusta - I'll try and find the right audio clip.

Rainman said:

I have bought more of this as well. But I don't expect much love from it for a while. It is in the doghouse at the moment.

Click to expand...

My thoughts on this are not worth much - i looked at IMF when I bought SGH, and all my analysis suggested that IMF was much more expensive, relative to my calculated IV, than SGH. Events have proven my analysis to be worth bugger all in this case!

Meanwhile I sit in the corner and lick my wounds!

Thanks Klogg, looks like there's enough "noise" around to follow need to watch the government's actions closely. Could take years for anything to happen, but they are definitely looking at it.

I'm also wary of the competition entering the market. Some of these will be "opportunistic" in nature, but some of them will be well resourced and disciplined players looking to compete for some of the profitable, lower risk cases. Seems to be lots of reports of a growing, expanding litigation market in Australia, that sort of attention always attracts interest.

Is there any way for IMF Bentham to place themselves in a position to keep getting the profitable class actions? Does reputation matter?

More on the Productivity Commission's proposed removal on the prohibition of lawyers charging "contingency fees":

http://www.companydirectors.com.au/...ne/legal-contingency-fees-coming-to-Australia

Rainman said:

I read the Federal Court judgment of the Full Court in the Bank Fees case. Chief Justice Allsop wrote the leading judgment. My view is that the basis on which the Full Court allowed ANZ's appeal is correct and that it will be upheld by the High Court. For that reason, I think the Bank Fees' case is going to be one of IMF's losers.

I remain long IMF and have recently started adding to my position. However, I am going to keep some powder dry because, if, as I expect, IMF's appeal to the High Court fails, its share price may dip down a little further following the High Court appeal.

Click to expand...

Your view is correct. The appeal was dismissed with costs.

Probably some sad faces on those members of the class action who hoped to have a win. Oh well, thems the risk with litigation. So pay your bills on time and not incur a late fee or use cash/debit card. That's the choice they face to avoid such fees I feel.

SmokeyGhost said:

Your view is correct. The appeal was dismissed with costs.

Probably some sad faces on those members of the class action who hoped to have a win. Oh well, thems the risk with litigation. So pay your bills on time and not incur a late fee or use cash/debit card. That's the choice they face to avoid such fees I feel.

Click to expand...

The Court was pretty scathing of the appeal. Rightly so, imo. IMF got involved in this case when it was chasing ever larger class actions. Thankfully it seems to have put those days behind it.

As an aside, Justice Keane went into some interesting legal history on where the common law against penalties originates. The Church was looking out for the nobility. Who would've ever guessed it could be so duplicitous.

Professor Biancalana273 has traced the common law's engagement with penalty clauses back to the 13th century,
noting that the penalty rule originated as an aspect of the jurisdictional tussle between the ecclesiastical courts and the courts of common law. According to Professor Biancalana, the common law courts were, at first, disposed to uphold penalty clauses as lawful, but by the turn of the 14th century had come to regard them as objectionable on the basis that they were a form of usury, which was unacceptable to medieval Christianity. It may also be said that the development of the law reflecting the Church's disapproval of usury was aligned with the economic interests of the dominant political class, the landed aristocracy, who, asset rich but cash poor, were chronically disinclined to keep their contractual engagements to those who had the recurring misfortune to have lent them money

...


Medieval religious scruples against usury associated with a primitive agrarian economy do not provide a satisfactory basis on which the penalty rule might now be sustained.

Click to expand...

I think these guys are ambulance chasers?

Not sure how I feel about the company however the set up on the charts looks pretty good with a nice base/reversal at a longer term key level

IMF Bentham Limited (IMF,
formerly Bentham IMF Limited) is engaged in the investigation, management and funding of litigation and arbitration claims in Australia and other jurisdictions. IMF's clients include ASX200 companies, SMEs, individuals and insolvency practitioners. IMF's commercial clients span a range of sectors, including financial services, superannuation funds, manufacturing, retail, mining, energy and resources, health, tourism, transport and pharmaceuticals.
https://www.marketindex.com.au/asx/imf

STOCK PERFORMANCE WATCH:
IMF Bentham Limited (ASX:IMF) has five years performance of 76.136364% and weekly performance of 8.77193%. The stock has been moved at 4.377104% throughout last twelve months. The stock has performed 11.510791% around last thirty days, and changed 2.310231% over the last three months.
IMF Bentham Limited (ASX:IMF) stock has performed 2.65% and changed AUD$0.08 while share value reached at AUD$3.1 in last trading transaction. At present, the stock 52 week high price sited at 3.33 and 52 week low situated at 2.23. 158865 shares traded on hands while it’s an average volume stands with 263168 shares. It paid dividend of AUD$0.049287 over a trailing one year period. The current analyst consensus rating clocked at 2 on company shares. Analysts estimated that stock to reach value at AUD$3.73 price in one-year period.
https://connectinginvestor.com/2018/12/29/what-are-analysts-saying-imf-bentham-limited-asximf/

IMF appears to be breaking out of the huge triangle consolidation pattern.

The chart below is part of a research project and should not be considered a recommendation to buy this stock. If you want to read more about the project log in to read the P2 Weekly Portfolio thread.

Setup: BO of a weekly triangle pattern
Grade A
Buy limit: 3.35, iSL 2.80, let it go much higher, trail stop conservatively

On April 3rd, 2020, IMF Bentham Limited (IMF) changed its name and ASX code to Omni Bridgeway Limited (OBL).

and up 50 percent

.

Omni Bridgeway Limited (ASX:OBL) is pleased to announce that it has entered into a framework agreement with funds managed by Ares Management Corporation for the establishment of a continuation fund (Fund 9) to acquire OBL’s co-investment in 150+ investments across Funds 2/3, Funds 4/5 Series I and one remaining balance sheet investment (together the Fund 9 Assets).

Ares will acquire a 70% interest in Fund 9 for an upfront cash consideration of c.A$310m paid to OBL, representing a c.80% fair value conversion rate, with OBL retaining 30% interest in Fund 9.

The upfront proceeds received by OBL represent a multiple on invested capital (MOIC) of c.3.2x on the aggregated OBL-only deployments to-date on the Fund 9 Assets. Ares will receive a preferred return on its 70% interest in Fund 9, while OBL will retain further profit rights on thewhole portfolio through its 30% interest.

Fund 9 will acquire OBL’s distribution entitlements and capital call obligations on the Fund 9 Assets. The OBL entitlement, calculation and distribution of performance fees and management fees on Funds 4/5 will remain unchanged and is out of scope of Fund 9.

Omni Bridgeway will be the adviser to Fund 9, remain the adviser to the Underlying Funds and continue to manage the Fund 9 Assets. In addition to the existing management fees from Funds 4/5, OBL will receive an annual management fee from Fund 9 of 2.0% on gross investment commitments outstanding.

As part of the transaction, Ares has the option to acquire up to a A$35m equity stake in Omni Bridgeway through the issuance of warrants at an agreed strike price..
.
sounds like a fee fest for all involved