Thu, Jun 4, 2020
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Diligence gaps raise flags as litigation finance gets boost

Tuesday, March 31, 2020

Bailey McCann, Opalesque New York:

Litigation finance firms could be unexpected beneficiaries of the coronavirus crisis. Litigation funders are usually paid out when cases resolve. However, as cases stall out in courts that are either closed or wrestling with how to conduct virtual trials, litigation funders stand to make higher returns as a result of the delays. If a case gets caught up in court, litigation funders are often entitled to a bigger payout than they otherwise would be to account for the delay.

Performance gains in litigation finance are likely to draw even more investors to this booming niche. Litigation finance funds claim to offer private equity style returns that are uncorrelated to the broader market. That claim has drawn billions of dollars in investor capital in recent years. Like private equity, investors can come into cases at different stages. The riskier vehicles invest in cases early on. The surer bets are later in the trajectory of a lawsuit when attorneys are reasonably clear on the size and scope of potential settlements and can craft investment agreements accordingly. To be successful in litigation finance, investors and funders alike have to be skilled at due diligence and modeling potential returns. Some high profile cases are raising questions about how much due diligence is really happening within litigation finance firms.

Shell games

Cases involving two Florida lawyers, a handful of litigation funders and the SEC, are n......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing: Millennium hedge fund ups bet against Bank of Ireland, Value rotation was the last thing big funds thought would happen, Al Gore's firm sold Amazon and Microsoft stock. Here's what it bought.[more]

    Millennium hedge fund ups bet against Bank of Ireland From Independent: US hedge fund Millennium International Management has raised its bet against Bank of Ireland's shares. It comes as Davy says 2020 will be a write-off for banks, with losses across Irish lenders of €4bn. M

  2. PE/VC: Private equity in the Covid-19 crisis, Carlyle's Africa dealmakers leave to start their own buyout firm, UK asset managers plan shift to off-market strategies including private equity[more]

    Private equity in the Covid-19 crisis From Morning Star: Private equity investment trusts invest in unquoted companies not yet listed on the stock market. How have they fared in the sell-off? Investment trusts have been caught up in the market turmoil of recent months and private equit

  3. New Launches: Apeira Capital seeks $200m for hedge fund-like bets, PIMCO filing reveals ESG fund launch could be ahead, BEA Systems co-founder launches venture fund, Salesforce Ventures launches $125m Europe Trailblazer Fund, The D. E. Shaw group closes first onshore China investment fund, Legg Mason and ClearBridge launch non-transparent ETF, Hong Kong-based asset manager MaiCapital launches actively managed bitcoin hedge fund[more]

    Apeira Capital seeks $200m for hedge fund-like bets From Bloomberg: Natalie Hwang, the former head of Simon Property Group Inc.'s venture capital arm, has launched a new firm and is seeking $200 million for a debut fund. Hwang has been discussing the vehicle with prospective investors, ac

  4. New Launches: Hedge fund Angelo Gordon raising $1.5bn for distressed energy debt, Amundi unveils eight new funds as part of ESG ETF range push, Mezzanine Management gears up for direct lending fund[more]

    Hedge fund Angelo Gordon raising $1.5bn for distressed energy debt From Reuters: Hedge fund Angelo Gordon & Co aims to raise as much as $1.5 billion to buy the debt of distressed oil and gas companies, according to a person familiar with the matter and an investor presentation viewed by R

  5. Tech: Robos fail their first big test, 'Video is fine': Venture capitalists find the benefits in digital due diligence[more]

    Robos fail their first big test From Advisor Perspectives: Robo-advisors faced their first big challenge with the bear market in the first quarter of 2020. They lost, and that is an ominous sign for the future of automated advice. All robos employ a degree of active management. They