Litigation finance is a small but growing industry, proving to be an attractive opportunity for investors looking for a new uncorrelated alternative asset class. Over the past five years, the UK litigation finance market has doubled (up from £1 billion in 2017).
Given this growth, it’s not surprising that private equity and venture capital investors are increasingly interested in the space.
To understand more, we were pleased to be joined by Robert Rothkopf, Managing Partner of Balance Legal Capital. He set up the firm in mid-2015 and is supported by litigation titans like Lord David Gold and Ian Terry.
The firm is pioneering the development of the industry in the UK and internationally, being ranked by Chambers and Partners 2021 in both the UK and APAC regions. Balance Legal Capital is also listed in this year’s Legal 500 as a key player in UK litigation funding.
It is also a proud member and supporter of the Association of Litigation Funders (ALF). The ALF is an independent body that has been charged by the Ministry of Justice with delivering self regulation of litigation funding in England and Wales.
Please enjoy and listen to our insightful discussion above to learn more about this fascinating sector, and discover where opportunities may lie.
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TOPICS:
00:00 - An Introduction to Litigation Finance
02:30 - Analyzing the Counter-Cyclical Nature of this Investment Category
03:00 - Exploring Market Opportunities in Litigation Financing
04:15 - Guest Speaker's Journey Leading to a Career in Law
06:30 - The Motivation Behind Robert's Departure from the Law Firm
08:03 - Qualities that Define an Exceptional Litigator
09:16 - Assembling the Key Personalities for Success: Robert's Strategy
12:24 - Identifying Cases Worthy of Investment
14:17 - Delving into the In-Depth Due Diligence Process per Case
16:47 - How Many Cases Are Selected for Investment?
18:13 - A Glimpse into the Current Portfolio: Types of Funded Cases
19:25 - The Investment Committee's Decision-Making Process
21:34 - Factors Determining Investment Size Relative to Returns
23:18 - The Competitive Landscape of the Litigation Financing Industry
26:18 - Case Studies: Notable Examples from the UK and Australia
29:15 - Strategies for Gaining a Competitive Edge in the Industry
30:01 - The Auto Industry's Vulnerability to Litigation
32:19 - Fund Structures and Profit Participation
32:58 - An In-Depth Look at Fund Structures
34:17 - Investor Timelines and Fund Durations
35:40 - Qualities of an Ideal Investor in Litigation Financing
36:29 - Navigating the High-Risk Nature of This Investment
38:01 - The Significance of ESG and Impact in Attracting Investors
41:16 - Reflecting on Achievements: What Defines Success in Five Years?
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All content on the Money Maze Podcast is for your general information and use only and is not intended to address your particular requirements. In particular, the content does not constitute any form of advice, recommendation, representation, endorsement or arrangement and is not intended to be relied upon by users in making (or refraining from making) any specific investment or other decisions. Guests and presenters may have positions in any of the investments discussed.