Investing in Litigation Finance and The Benefits
Perhaps you may have heard of Litigation Finance but not sure how you can be involved? Litigation Finance, or Litigation Funding, first came about in the Australian insolvency industry over twenty years ago and has now since expanded to cover a range of disputes and claims.
What is Litigation Finance?
Litigation Finance is when a third party provides capital to a plaintiff, in return for a share of any successful financial outcomes from the lawsuit. The funder will receive a share in the profits of the case. Funding provided applies to the costs of litigation, including attorney’s fees, investigative fees, expert witness fees and court expenses.
Benefits of Litigation Finance
Ligation finance makes strategic corporate sense in terms of mitigating downside risk, offering security and the advantage of focusing on the problem at hand rather than concerning about costs. Everyone and anyone can benefit, from individuals to class actions, large companies to universities and businesses of all sizes. Additional benefits include:
- Helping smaller firms with limited financial resources to have a fair chance (similar to assisting David to fight Goliath, litigation finance provides David with a slingshot)
- Liquidity for working capital – so businesses can spend on marketing, re-search, and development to continue growing their business rather than paying legal bills.
- Time for negotiation – reducing the risk of a premature settlement or having to acquiesce to low-ball offers.
- Accessing top legal talent – funds can help recruit top legal talent which further increases the chance of success.
Why Invest in Litigation Finance?
Litigation Finance is a non-correlated, alternative asset class which produces strong and absolute returns:
- Uncorrelated to Traditional Capital Markets – regardless of how the economy is doing, there’s always going to be legal claims. Interest rates, stocks and bonds are irrelevant when it comes to litigation finance.
- Outsized Risk Portfolios – as a non-mainstream investment which already average high returns, litigation finance outperforms other alternative investments.
- Moderate Time to Liquidity – the liquidity time for litigation finance is only 12 – 24 months. Comparable to other alternative assets such as venture capital, and much more preferable to traditional investments such as real estate which usually has a reasonably long time to liquidity.
Greenpark Platinum’s speciality is litigation finance. We are renowned globally for raising capital in Litigation Finance cases. At Greenpark Platinum, we utilise our extensive knowledge and experience, to deliver unique opportunities to diversify portfolios and generate returns that are not related to organisational performance or stock markets.
Are you interested in finding out more? Visit our Process page to see how you can get started or get in touch with our team today.
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