Alternative investments have immense benefits in the form of exposure to unique asset classes, outsized return profiles, tax optimisation characteristics, a non-volatile nature, and uncorrelated performance to traditional assets.

While there is very little not to like, alternative assets were typically only available to very large institutions and endowments. And while that’s generally still true, private investors are now gaining exposure to this attractive asset class.

What sort of alternatives do we participate in?

Our selection process examines individual syndications as well as broader funds with exposure to real estate, private equity, venture capital, private debt and credit strategies, hedge funds, and litigation finance.

Since most of these strategies are outside of our core competence, we do thorough due diligence on the manager’s aptitude, their long-term track record, and their execution plan. You could say we are betting on the jockey, as well as the horse.

One area of focus where we allocate considerable capital is the funding of advantageous litigation claims. There is a great deal to like about litigation finance as an asset class. 

     1) Funding legal claims can result in extremely high returns upon a successful settlement or a                 court win. These returns often exceed private equity plays, without any use of leverage.

     2) Legal outcomes are entirely disconnected from the business cycle and completely                                 uncorrelated to other traditional assets like stocks, bonds, and real estate. This is an incredibly             powerful feature of portfolio protection.

     3) Litigation finance offers a natural liquidity event during a favourable settlement or court                       outcome —  something not available with real estate, private equity, or venture capital.

How do we fund litigation claims?

While there are numerous ways to gain exposure, we allocate our capital via three strategies: 

• very often, we will finance a law firm as a funding partner
• sometimes, we will invest as LPs in a diversified litigation fund
• once in a while, we will finance an attractive individual claim

Each has its own set of advantages and disadvantages. And what are some of the key characteristics of an attractive legal opportunity?

It all starts with strong legal merits, where the depth of evidence and case facts align with the prevailing law of the jurisdiction (we only focus on common law jurisdictions like the US and the UK). Just as importantly, we are betting on the experience and competence of the legal team. 

We also want to make sure the defendant’s creditworthiness is solvent and liquid via asset traceability. Finally, we search for opportunities with substantial quantum (claim value) which happens to be material in size relative to litigating costs, resulting in a potential asymmetric payoff.

Interested in co-investing alongside us in exclusive litigation opportunities and other alternative asset deals? Please get in contact.