Litigation Funding

An alternative asset class that provides finance to individuals or companies, who wish to take legal action against another individual or company, and who, though they may have a very strong case, lack the necessary finance to undertake litigation. If the legal case is won, investors funding the legal cost take a share of the proceeds.

Royce Equity Management , through its Legal Practitioner Specialist in the field who act as funding managers, locates opportunities in the Third Party Litigation Funding sector:

With the recent demise of the global asset market, even so-called 'alternative assets' (including hedge funds, private equity and real estate) have demonstrated an inextricable link or 'correlation' to the stock market.

We believe that true 'alternative assets' are not tied to the stock market but perform independently - incurring no market volatility (and therefore significantly reduced risk).

Royce Asset provides its clients access to this true alternative asset class in a global multi-billion dollar growth industry - Third Party Litigation Funding.

To quote The Banker, 'Legal Crisis Turns Law into an Asset Class' September, 2008

"In today's declining market amid rising insolvencies, investors are inevitably paying attention to the uncorrelated returns offered by litigation financing. It is a new alternative asset class rapidly gaining attention for its ability to deliver exceptional returns that are not correlated with the stock market."

Litigation is big business - an industry expected to reach $300 billion annually by 2011. The barrier of 'cost' in pursuing litigation has been somewhat removed with the advent of Litigation Funding. 'Third Party' Litigation Funding involves an outside party offering financial support to a plaintiff in return for a share of the settlement monies. Essentially, a 'plaintiff' can accept financial help to pursue an action - agreeing to share a predetermined proportion of the settlement with the funder(s).

Benefits to the 'funder(s)'

Funders get to share in a substantial portion of the settlement. With access to leading Litigation Funding networks in Australia and the UK, Royce Asset offers clients a unique opportunity to capitalize on returns that, put simply - are not being realized anywhere else on the asset horizon.

Cases undergo extensive due diligence with only those offering a 70% or greater chance of success being funded. Legal fees are negotiated and capped with insurances taken to protect clients from potential adverse costs. On average, 60-80% of matters are settled out of court with settlement taking only 9 to 18 months.

Returns on Third Party Litigation funding are typically much faster than other asset classes.

Structures have been created to offer principal protection for investors for the duration of the investment commitment as derived from contingent insurability of most aspects of the specific case litigation itself. We invite you to take a look at some of the structures to be offered that can take the forms of out right investment in the stock of companies that are the now major players in the industry which include insurance companies and hedge funds to Private Placements offerings (PPMs), Guaranteed Principal Protected Notes, IPOs and Pre IPO opportunities.

This is a rapidly changing market with new participation approaches coming on stream. If Litigation Funding is something that excites you as much as it does us, then we encourage your enquiry Contact Us

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