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Sydney-based litigation funder IMF Bentham Ltd. has launched a $500 million fund to underwrite disputes outside the United States.

The fund, called Fund 5, is IMF Bentham's second non-U.S. fund and is launching just two years after the litigation funder launched the first, which had an aggregate capital of about $115 million focused on investments in Australia, Asia, Canada and Europe. That fund was upsized in January to about $125 million.

DLA Piper and offshore firm Walkers advised IMF Bentham on the Fund 5 transaction.

IMF Bentham said it is increasing its fund capacity in direct response to increasing demand for dispute resolution finance around the world. 

Fund 5 could double to $1 billion as investors have the option to roll into a successor fund on the same terms. IMF Bentham committed $100 million in cash to Fund 5, according to a regulatory filing with the Australian Securities Exchange, and the remaining funds were contributed by external investors, including funds managed by London-based Partners Capital Investment Group, Harvard University's endowment arm Harvard Management Co. Inc., Singapore-based Amitell Capital and Toronto-based Balmoral Wood.

Fund 5 will invest in disputes in Australia, Asia and Canada as well as Europe, the Middle East and Africa, across a broad range of dispute types, including insolvencies, group actions, international arbitration and commercial litigation. In February of this year, Hong Kong began allowing third-party funding of international arbitration. Singapore started allowing it in March 2017.

With Fund 5, IMF Bentham has almost $1.4 billion in combined funds under management globally.

“IMF is experiencing strong market demand for funding across all jurisdictions,” the litigation funder's Perth-based managing director and chief executive officer, Andrew Saker, said in a statement.

Since 2015, IMF Bentham recorded an 85% increase in the number of non-U.S. funding applications and a 149% increase in U.S. funding applications. The demand for dispute resolution finance is growing as a result of increased awareness, the increasing costs of arbitration and litigation and regulatory changes allowing parties to seek dispute resolution finance, Saker explained.

“Demand is particularly strong in Asia and Canada, where dispute resolution finance is still relatively new but it is becoming a mainstream global financial product,” he said.

In April, IMF Bentham partnered with Boies Schiller Flexner to provide up to $30 million in funding capital toward Vietnam-related cross-border disputes.

IMF Bentham has offices in Hong Kong and Singapore in Asia, as well as in Sydney, Perth, Brisbane, Melbourne and Adelaide in Australia.