Regulatory Shifts and Pending Settlements Pose Key Risks for Omni Bridgeway’s Growth

Record Financial Performance in FY25

Omni Bridgeway Limited (ASX – OBL) has announced a landmark year for its investment portfolio, reporting total proceeds of A$555.5 million for the financial year ended 30 June 2025. Of this, A$353.0 million is provisionally attributable to the company, excluding management and performance fees. This milestone reflects a combination of a significant Fund 9 transaction and numerous full and partial investment completions.

The company’s multiple on invested capital (MOIC) for FY25 stood at an impressive 2.5x, derived from 60 completions, underscoring the effectiveness of its investment strategy in the legal finance sector. The fair value conversion ratio of 103% further indicates strong alignment between reported valuations and actual cash proceeds.

Robust New Commitments and Pipeline

Omni Bridgeway secured A$517.0 million in new commitments during FY25, which translated into a fair value uplift of A$525.9 million. Notably, A$46.0 million of this came from third-party co-investment capital, highlighting the company’s ability to attract external funding alongside its own investments.

The pipeline remains vibrant, with 30 agreed term sheets representing approximately A$234.5 million in potential new commitments. This strong deal flow suggests continued momentum heading into FY26, supported by a market environment that is seeing reduced competition and improved risk-adjusted pricing following industry consolidation.

Positive Regulatory Environment Bolsters Sector Confidence

Regulatory developments across the European Union, United Kingdom, and United States have been favourable for Omni Bridgeway’s business model. The European Commission’s recent study on third-party litigation funding highlights broad stakeholder support and recommends light-touch supervision focused on transparency and capital adequacy.

Similarly, the UK Civil Justice Council’s final report advocates urgent legislation to clarify the legality of litigation funding agreements, reversing restrictive rulings and endorsing percentage-based success fees. The UK Court of Appeal’s recent decision further reinforces the legitimacy of revised funding models.

In the US, the enactment of the 2025 budget bill without adverse provisions for legal finance reflects bipartisan support and removes a key regulatory uncertainty for the sector.

Operational Discipline and Capital Management

Operating expenses for FY25 were A$84.1 million, in line with company targets and with anticipated reductions planned for FY26. Omni Bridgeway maintains a healthy cash and receivables position of A$146.2 million, providing ample liquidity to fund ongoing operations and co-investment opportunities.

The capital raise for Funds 4/5 Series II is progressing well, with multiple closings expected to complete by the end of calendar year 2025. This will further strengthen the company’s capital base and investment capacity.

Looking Ahead

Omni Bridgeway’s strong FY25 results, combined with a robust pipeline and supportive regulatory landscape, position the company well for continued growth. The upcoming full-year results presentation will provide further guidance on capital allocation and distribution policies, which investors will watch closely.