Ares Management Corp has acquired a majority stake in a new fund launched by Australia-based litigation finance specialist Omni Bridgeway.
This represents Ares’ first foray into the litigation finance space, and followed approximately six months of due diligence.
Under the terms of the agreement, a new fund will be created which will include more than 150 Omni co-investments. Ares will take a 70 per cent stake in the fund for AUS$310m (£153.36m), with Omni retaining the remaining 30 per cent share of the fund.
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Omni Bridgeway is publicly listed on the Australian Stock Exchange and invests in the upfront costs of lawsuits. If the lawsuits are successful, Omni shares in the returns.
Omni’s managing director and chief executive Raymond van Hulst said that the Ares deal will allow his company to become debt free while accessing new sources of capital.
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“This is probably the first time there’s been a transaction of this scope,” van Hulst added.
“It’s one step further for legal assets becoming a more regular and accepted asset class.”
Omni Bridgeway will be an adviser on the new fund with Ares, and it has the option to acquire an equity stake of up to AUS$35m through the issuance of warrants at an agreed strike price.
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