Australian litigation funder LCM has more than doubled its fiscal first-half profit and says its growth is likely to continue because it is a counter-cyclical business and instability drives an increase in disputes.

The company earned revenue of A$24 million (US$14.5 million) in the six months to Dec. 31, up from A$11.7 million (US$7 million) a year earlier.

Pre-tax profit of A$6.2 million (US$3.7 million) was significantly higher than the A$1 million (US$600,000) from the year before.

Profits were boosted by "continued investment discipline" and corporate portfolio funding making its first contribution to the revenue line.

In corporate portfolio funding, a litigation funder provides cash for a company to fund a range of cases rather than just a single action.

The funder said in its financial statements that its strategic alliance with an unnamed international law firm with a large disputes practice—which allows it a right of first refusal of all "opportunities" from the firm—has proved "exceptionally valuable." It has also entered into a second alliance in Australia.

The company is also close to raising its target of up to US$150 million for the LCM Global Alternative Returns Fund, which funds litigation on behalf of outside investors.

LCM said it is expecting increased opportunities because difficult global markets and instability drive an increase in disputes.

"Corporates are reluctant to allocate financial resources towards those disputes," the company said in its written results presentation. "Given LCM's heritage, it has strong and deep relationships in the insolvency and restructuring industry, which leads into increased application activity."

Last week, London-headquartered and listed litigation funder Burford Capital said it would delay its annual results because its New York office is closed and two key staff members have had to self-quarantine. It had previously warned of a profit dip.

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