IMF Bentham Limited Annual Report 2018

Introduction We are now three years into the five-year Strategic Business Plan we commenced in 2015. We are delighted to report the progress and completion of many of the significant objectives in that plan. Over the past three years, our focus has been to mitigate business risk through diversification. Our risk diversification strategy has involved expanding our geographic footprint and growing our team, increasing the number and variety of cases in which we invest and seeking alternative sources of capital. Before we delve into the detail of what we have achieved in each of these areas, we set out the underlying principles of our decision-making. Our company values are transparency, innovation, entrepreneurship, fairness, partnership and rigour. It is therefore important to us that our stakeholders are clear about what underpins our approach to doing business. – We will take the long-term view over the short-term, every time This means preferring to maximise the value of future cashflow over an immediate uplift in profitability. It involves assessing risk and reward differently from some other businesses. It necessarily means analysing the industry and its continuing transformation and making changes now that will deliver value over time. Some of the decisions we have implemented recently may not assist with short term profitability but success in business, as in life, usually comes down to choosing the pain of discipline over the ease of short-term rewards. And that’s what we are prepared to do. Chairman’s and Managing Director’s Report – Fortune favours the bold… and wise We will make bold decisions where it is prudent to do so. Our Investment Committee (“IC”) is the forum in which potential investments are analysed and debated with rigour in the context of our corporate strategy. Last financial year we welcomed to our IC former Justice of the Supreme Court of South Australia, Mr John Sulan QC, and former Chief Judge of the Northern District of California, Mr Vaughn Walker. Along with our in-house members, including Hugh McLernon and Clive Bowman who have served since the company was founded, our IC is a formidable assembly where case merits and strategies are discussed openly and robustly. It is the collective heart of the company’s investment decisions. – We are prioritising growth for long-term profitability We need to maintain strong positions in existing markets while encouraging growth in emerging areas of the rapidly evolving market. We are growing our capacity through team and geographic expansion and also growing our capability through new product and service development. If we continue to execute our services at the highest level and educate the market about new developments and offerings we are confident that long-term profitability will follow. – Only the best will do To be an Investment Manager or Legal Counsel at IMF Bentham requires an exceptional formal education, commercial acumen and a breadth and depth of experience in law (particularly litigation and alternative dispute resolution). Investment Managers make decisions every day that involve risk, and often carry some combination of financial, legal, reputational, and personal repercussions. They must be adept negotiators, because they are frequently required to negotiate funding terms, pricing, legal strategy, conditions of settlement and more. Similarly, to be a member of IMF Bentham’s central management team requires dedication to your field of expertise and to the mission of building a business and an industry. Each new addition to our team is an occasion for celebration because each person contributes to the ongoing shaping of our company culture and its continued growth. And now we turn to the details of this year’s activities and outcomes. Andrew Saker MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER Michael Kay NON-EXECUTIVE CHAIRMAN 4