Bloomberg Law profiles Ashley Keller and Adam Gerchen as serial law entrepreneurs who have now raised $750M to fund the first secondary transaction litigation fund. Six years ago, Mr. Keller and Mr. Gerchen made headlines by selling their litigation finance firm for upwards of $160M to Burford Capital. Bloomberg Law reports that the secondary deal landscape for litigation finance is in its infancy. News of Keller and Gerchen’s new secondary market fund (under the banner of Gerchen Capital Partners) is being viewed as a signal of the maturing nature of litigation investment broadly.
According to Bloomberg Law, $225M of proceeds from the fund have been dispatched. In one instance, funds were disbursed to purchase a 30% stake from Omni Bridgeway’s investment in an Australian class action. Sources say Omni was overweight with ‘combustible cladding’ claims in Australia and decided to offload some of the risk to the secondary market.
Bloomberg reports that Gerchen Capital Partners submitted $19.5M to Omni for the stake. A regulatory filing discloses Omni banking a $16M profit for the transaction. Bloomberg’s insights suggest that Mr. Keller and Mr. Gerchen are looking to usher in a robust secondary marketplace for litigation investors.
Active debate around a robust secondary market for litigation finance is ongoing. Many suggest that savvy litigation funders would only offload assets if concerned about losing the claim, or not being able to enforce a successful outcome. However, others suggest the needs of litigation franchises change over time, as claims can often take years to reach resolution. Hence there may be a need for a secondary market in Litigation Finance.
