Dalelorenzo's GDI Blog
15Jun/210

The bankers, brokers, and big money transforming litigation finance from a lawyer’s hustle to a multibillion-dollar asset class

Headshots of Ralph Sutton, Aviva Will, Brandon Baier, and Stuart Grant on a background of gavels and dollar bills From left: Ralph Sutton, Aviva Will, Brandon Baer, and Stuart Grant.

Litigation finance is growing, with a reported $11 billion endowed or ready to invest in suits. What was immediately a niche manufacture is now swarmed with consultants, bankers, and public business. We was talking about over 25 funders, solicitors, and finance professionals to learn who's shaping the field. See more stories on Insider's business page.

Paying for someone else's litigation used to be illegal. Now it's a multibillion-dollar opportunity.

Commercial litigation funders make money by boosting fund to enterprises that shortfall additional resources or the persistence for a lawsuit. In return, they get a multiple of what the fuck is invested( often doubled or triple) or a return secured to an interest rate. Litigation funders now have $11.3 billion expended or ready to invest in US commercial-grade litigation, according to a recent estimate by Westfleet Advisors.

The original prosecution magnates in the US were often plaintiffs' advocates, whose contingency-fee model - "no fee unless we win" - is a form of self-funding. A simple slip and drop-off might net simply a $10,000 fee, but complex and high-risk lawsuits is likely to be advantageous; the lawyers hired by states to sue tobacco companionships in the 1990 s made billions.

Today, case finance is still much work specialized, even corporate. While funders still back gigantic groups of little guys, like motorists who bought a grimy diesel from Volkswagen or patronizes that say Visa and Mastercard billed excess rewards, they too chipped deals with big businesses, like supermarket chains that overpaid for broiler chickens and manufacturers that conceive their trade secrets have been stolen.

"This asset class is growing and evolving and becoming an professed one of the purposes of the litigation industry, " said Bill Farrell, a managing director at Longford Capital, a private-litigation funder.

Westfleet Advisors, the source of the $11.3 billion think, has said there are at least 46 prosecution funders active in the US market.

Heavy-hitting industry actors include hedge funds like Fortress Investment Group and D.E. Shaw& Co. Bankers at Stifel and Jefferies have also worked on legal-industry slews. And some of the biggest funders have formed a trade group, the International Legal Finance Association, meant to be a counterweight to groups like the US Chamber of Commerce that would like to see more the rules of their industry.

Commercial-litigation finance is fraught with risk. In many cases, the money is nonrecourse, meaning that if a client is abortive, investors abide a total loss. But many funders have done investments in portfolios of cases, in which a prevail against one adversary can offset a loss against another. And some corporations specialize in determining lends to constitution firms that are backed by guarantees, though such companies aren't the focus of this article.

Since 2020, Insider has spoken with dozens of funders, lawyers, and finance professionals about the commercial-litigation finance industry, with particular attention paid to the US and on investments in categories other than patent litigation. Below are some of the companies and individuals they singled out for their affect and savvy.

Billion-dollar behemoths

Aviva Will, co-chief operating officer of Burford Capital. Aviva Will, co-chief operating officer of Burford Capital.

Burford Capital, which reported a $4.5 billion portfolio in its last-place annual report, is one of the top dogs in litigation finance. It haunts a mixture of strategies, fund single cases and groups of cases while also bisect deals instantly with corporations that might have big law asserts but paucity the bandwidth to pursue them. Its co-chief operating officer Aviva Will is involved with underwriting major slews, with subsistence from a large staff with expertise in guarantee, IP, and other areas.One of Burford's biggest suits is the so-called Peterson case, which was begun as a claim against the Argentinian government that Burford paid EUR1 5 million ($ 18 million) to acquire. Its price have increased as the case has progressed, and the company sold 10% of the claim for $ 100 million in 2019. Burford has also been targeted by the short-seller Muddy Waters.

Omni Bridgeway, with locatings around the globe, manages about AU $2.2 billion ($ 1.7 billion ), according to its most recent annual report. With seeds in Australia, it still has major specimen there, like a firefighting-foam contamination case that settled for AU $213 million ($ 167 million) last year. But it also has dozens of workers in the US, including Jim Batson in New York and Matthew Harrison in San Francisco. Chief Investment Officer Allison Chock gets involved in big deals.

Eric Blinderman of Therium Capital Management. Eric Blinderman of Therium Capital Management.

Therium Capital Management is another major funder, though unlike Burford and Omni, it isn't publicly traded. It says it's raised $1.1 billion, including a PS325 million ($ 460 million) raise in 2019 from institutional investors and an indeterminate sovereign fortune money. While its work in the US is somewhat under wraps, it has worked on several major bags in Europe, including funding claims against Volkswagen in its 2015 radiations scandal.

Neil Purslow fees different groups, and Eric Blindermann fees the Therium Inc. squad in the US. He said the US speculations flow the assortment, from a recent$ 5 million investment in an antitrust prosecution to a $10 million-plus investment in a portfolio of the assurances suits was put forward by a major international law firm.

Ellora MacPherson of Harbour Litigation Funding. Ellora MacPherson of Harbour Litigation Funding.

Harbour Litigation Funding is well known in its basi in Europe, but it has been looking for opportunities in the US, which amounts for about 10% of its asset portfolio, according to Chief Investment Officer Ellora Macpherson. The corporation, which is privately held, says on its website that it has raised more than $1.5 billion and has financed case against Uber in Australia, arbitration against Italy's governments countless shareholder prosecutions around the world. Its US representative is Kory Parkhurst.

Longford Capital is another major player and has established headlines with an effort to team up with academies like the University of California, Santa Barbara to monetize the patents developed by its investigates. Longford has given rise to more than $1.1 billion, including $435 million earlier this year. A recent regulatory filing directories a Fund P with more than $ 119 million in egregious resources whose cosmo hasn't previously been reported. Bill Farrell, Tim Farrell and Michael Nicolas are its leaders.

Pure-play private funders

Stuart Grant of Bench Walk Advisors. Stuart Grant of Bench Walk Advisors.

Bench Walk Advisors was cofounded in 2018 by Stuart Grant, a former lawyer at Skadden who likewise cofounded Grant& Eisenhofer, a top house for shareholders prosecution. Grant said in an interview with Reuters that he changed focus to litigation finance after a few adverse court rulings because "I don't like losing." His litigation-funding shop claimed a 93% triumph pace as of the end of last year. It says it's endowed more than $ 300 million.

Brandon Baer of Contingency Capital Brandon Baer of Contingency Capital.

Contingency Capital was launched in November by Brandon Baer, an experienced lender who co-led the legal-assets group at Fortress. While the house is still brand-new and not much about its activities are known, it's minority-owned by TFG Asset Management, which manages $30.7 billion, and has coinvesting commitments from Fortress and an undisclosed fixed-income manager totaling $1.4 billion.

The team has recently grown with hires including Jeff Cohen from Southpaw Asset Management and Kacey Wolmer, who took part in from FirstKey Mortgage.

From left to right, Adam Gill, Jamison Lynch and David Spiegel of litigation funder GLS Capital. From left: Adam Gill, Jamison Lynch and David Spiegel of GLS Capital.

GLS Capital is a relatively new house run by familiar faces. Adam Gill, Jamison Lynch, and David Spiegel, its three succeeding partners, got their start at Gerchen Keller Capital, which was sold to Burford for $160 million in 2016. Several people listed on the firm's website have backgrounds in pharmaceuticals and life sciences, where disputes involving licenses, patents, and other intellectual-property matters are common.

"We review slews anywhere between$ 1 million and $50 million in size, " Spiegel said. "Our sweet spot is between$ 5 million and $10 million."

Lake Whillans, founded by Lee Drucker and Boaz Weinstein, is also quoth as a major player. Said by one spectator to be "comfortable with more distressed, bushy situations, " the company fostered $125 million in late 2017. At least one of its cases has been publicly disclosed: a$ 5 million stake in a case brought by Cel-Sci, a drug developer.

Eva Shang of Legalist. Eva Shang of Legalist.

Legalist has funded commercial-grade claims and mass-tort litigation. The firm, run by the Harvard dropout Eva Shang, has emphasized its use of analytics to identify investment opportunities. Shang has said its investments average $500,000 apiece, smaller than those made by other funders.

LexShares, run by Jay Greenberg, has also emphasized a data-driven approach, squandering a program it calls the "Diamond Mine" to find investment opportunities in court filings. The firm tribunals individual investors as well as institutions and announced last year that it was raising an additional $ 100 million to invest in cases.

Aaron Katz and Howie Shams of Parabellum Capital. Aaron Katz and Howie Shams of Parabellum Capital.

Parabellum Capital is ruled by Howie Shams and Aaron Katz, two ex-servicemen of Credit Suisse's legal-risk strategies and finance group, one of the earliest cooperations by a mainstream international financial institutions in the litigation-funding space. Its Form ADV indices more than $ 666 million in discretionary regulatory resources under conduct as of the end of 2020 and says its investments tend to range from$ 2 million to $15 million depending on whether it's investing in a smaller single case or a larger portfolio. Parabellum is one of a subset of funders that also invests in patent litigation.

Ralph Sutton of Validity Finance. Ralph Sutton of Validity Finance.

Validity Finance is led by Ralph Sutton, another alumnu of Credit Suisse's early undertaking. The firm, which was set up with $250 million from TowerBrook Capital Partner, said last year that it has deployed $125 million across a range of court cases and arbitrations and collected another $100 million.

Mainstream investors

David Gallagher and Sarah Johnson, the leaders of D.E. Shaw & Co.'s litigation finance unit. David Gallagher and Sarah Johnson, the leaders of D.E. Shaw& Co.'s case finance group.

D.E. Shaw's litigation-funding team is resulted jointly by David Gallagher, an alumnus of one of Omni Bridgeway's predecessor companies, and Sarah Johnson, who has spent 15 years in D.E. Shaw's corporate approval cell. The team's "sweet spot" is investments of $20 million to $ 50 million, according to the company, and it focuses on quick decisions and flexible terms.

The Fortress team is led by Jack Neumark, with Joe Dunn described by some people as his right-hand man.( The firm has also been involved in high-stakes patent disputes, but a different crew led by Eran Zur handles those considers .) While Fortress has instantly funded some high-stakes disputes and bought prosecution affirms, it's too been known to extend credit to other case funders, including Vannin Capital.

Tenor Capital has $5.4 billion and has employed some of that fund to back various mining companies in their declares against foreign governments. Led since 2004 by Robin Shah, a JPMorgan alumnus, with Blair Wallace, formerly of Och Ziff, managing a portfolio of prosecution, the house has backed Crystallex, which is trying to seize Citgo in order to collect a $1.2 billion award against Venezuela; Eco Oro, which has sued Colombia; and Gabriel Resource, which seeks to hold Romania accountable for scuttling the continuing operation there.

The intermediaries and bankers

Westfleet Advisors and its founder, Charles Agee, are members of two identifies that regularly spring from the cheeks of solicitors and funders in the litigation-finance industry. He and his colleagues Gretchen Lowe and Barry Kamar connect claimants, advocates, and investors. They also regularly conduct and publish inspections of the industry.

Andrew Langhoff is also regularly quoth as a trusted root of perspective and opportunities by people in the industry. A onetime Big Law litigator who went on to hold roles at Burford and at Gerchen Keller, Langhoff now runs Red Aqueducts Advisors.

Stifel Financial fixed headlines in 2019 when it hired Justin Brass and Sarah Lieber from Jeffries. Brass, a former insolvency solicitor, and Lieber, who worked for an insurer after years at Jones Day, are both Burford alumni. While numerous commentators said a lack of standardization has acquired litigation-finance financings hard to flip, Stifel said Brass and Lieber have syndicated more than$ 1 billion in litigation assets since be participating in 2019.

"If I'm playing checkers, they're actually representing three-dimensional chess, " one lawyer who's worked with them said.

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19Mar/210

Donald Trump Jr. and Kimberly Guilfoyle just sold their Hamptons house for $8 million – nearly double what they paid for it in 2019. Look inside the 7-bedroom home.

donald trump jr hamptons house The Bridgehampton home sits on 3.9 acres in a gated community.

Donald Trump Jr. and Kimberly Guilfoyle just sold their Hamptons live for $8.14 million. The 7-bedroom waterfront home in Bridgehampton comes with a heated outdoor kitty, spa, and waterfall. The marry is now looking for a home in Florida. See more stories on Insider's business page.

Donald Trump Jr. and his girlfriend, onetime Fox News emcee Kimberly Guilfoyle, just sold their house in the Hamptons for $8.14 million, a source close to Guilfoyle confirmed to Insider.

donald trump jr hamptons house Trump and Guilfoyle's bought the Bridgehampton home almost two years ago.

The couple practically redoubled the return on their be invested in the Bridgehampton home, which they purchased for $ 4.4 million in the summer of 2019.

The home was not publicly listed, according to Page Six, who first reported the spate. James Giugliano and Shawn Egan of Nestseekers brokered the spate, per the Page Six report. The operators didn't immediately respond to Insider's request for comment.

Trump Jr. and Guilfoyle, who have been together since at least June 2018, are now looking for a home in Florida as the rest of the Trump family relocates to the Sunshine State, the source close to Guilfoyle said.

Kimberly Guilfoyle and Donald Trump Jr. Guilfoyle and Trump Jr. at a Ted Cruz Rally in Texas in October 2018.

In January, virtually the entire Trump family manufactured moves to Florida.

Former president Donald Trump and Melania Trump left Washington, DC hours before Biden's inauguration and took up residency in Trump's Mar-a-Lago club .

The day before, The Wall Street Journal reported that Ivanka Trump and Jared Kushner signed a rental for a "large, unfurnished unit" in a Miami Beach condominium building for at least a year. This move came after the couple bought a $32 million spate in December on a high-security private island in Miami that's known as the "Billionaire Bunker."

Page Six reported at the time that Tiffany Trump was also looking for property in Miami.

Trump Jr. and Guilfoyle's sale of their Bridgehampton pad comes as the Hamptons real-estate market has boomed during the course of its pandemic.

donald trump jr hamptons house

The exclusive deprive of hamlets on New York's Long Island has construed bidding conflicts and dwellings flying off the market at record rates, Insider's Juliana Kaplan recently reported.

The 9,200 -square-foot Bridgehampton home sits on practically four acres in a private gated community, according to a onetime inventory.

donald trump jr hamptons house

The living room features a fireplace and high-pitched ceilings .

A formal dining room posteriors at least eight people.

donald trump jr hamptons house

Source: Corcoran

Another dining area is just off the kitchen.

donald trump jr hamptons house

Source: Corcoran

The comfortable, farmhouse-style kitchen is divided by a large island.

donald trump jr hamptons house

Source: Corcoran

The kitchen extends out to a screened patio mis the consortium.

donald trump jr hamptons house

Source: Corcoran

The home's master collection has its own sitting sphere and private deck.

donald trump jr hamptons house

Source: Corcoran

There are currently six other bedrooms in addition to the master suite.

donald trump jr hamptons house

Source: Corcoran

And they each come with an en-suite bathroom.

donald trump jr hamptons house

In total, the residence has 10.5 full showers and one half-bathroom.

The directory photos testify multiple sitting spheres throughout the house.

donald trump jr hamptons house

Source: Corcoran

A game room with a billiards table opens up to one of the floors.

donald trump jr hamptons house

Source: Corcoran

The room is hours from the beach and includes vast mahogany and stone porches, a hot puddle and spa with a cascade, and waterfront access to a 25 -acre pond.

donald trump jr hamptons house The Bridgehampton home sits on 3.9 acres in a gated community.

Source: Corcoran

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