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Industry Spotlight: Litigation Finance

Post on: May 8, 2017 | Mat Dellorso | 0

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Litigation finance, an asset class typically reserved for institutional investors, is becoming more accessible through online investment platforms. LexShares, a valued WealthForge partner, is one of the leading online platforms for investing in legal claims. 

Lexshares connects plaintiffs in commercial legal disputes with investors to fund their cases. They target a broad range of commercial legal claims at all stages of litigation.

Some of the reasons investors find litigation finance attractive include:

  • Returns are uncorrelated to traditional capital markets
  • The market is undercapitalized*, allowing investors to be highly selective with investment opportunities
  • Moderate investment lifecycle compared to other alternative investments

LexShares partnered with WealthForge to use our broker-dealer and technology services to raise private capital for over 30 cases since 2014. The median IRR net of fees for cases having reached resolution was 88%.

Here's an excerpt of a press release a about a case that generated a 93% annualized return that raised capital using the WealthForge platfrom:

"In the qui tam case filed in 2008, Jennifer Perez alleged that her former employer Stericycle, the publicly traded medical waste disposal company, defrauded various government customers by withholding accurate pricing data, adding unallowable charges to each bill, and concealing its intent to add these 18% increases which occurred every 9 months. LexShares’ investors provided capital to the relator in early 2015 and Stericycle settled the case for $28.5 million in late 2015."

Read full press release here.


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*Based on LexShares internal research: https://www.lexshares.com/pages/investors

Disclaimer: WealthForge provides this information to our clients and other friends for educational purposes only. It should not be construed or relied upon as legal advice.

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Mat Dellorso

Mat helps drive WealthForge's vision forward with his passion for innovation and background in entrepreneurship. Mat helps lead company strategy and growth and is a frequent industry speaker on how WealthForge is powering the future of private capital markets.
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