Zachary Cefaratti, the CEO of Dubai-based Dalma Capital is classifying litigation funding as “the most attractive asset class we’ve seen.” Cefaratti loves the risk/return profile, coupled with the relatively short lifecycle of the investment.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
Zachary Cefaratti, the CEO of Dubai-based Dalma Capital is classifying litigation funding as “the most attractive asset class we’ve seen.” Cefaratti loves the risk/return profile, coupled with the relatively short lifecycle of the investment.
As reported in Zawya, Cefaratti was speaking on a panel at an AIM summit for alternative investors when he lauded the industry, and went on to say that he predicts the market size will double over the next five years, thanks to its structure as a non-correlated asset.
Cefaratti asserted that the funding market is negatively correlated with economic downturns which would imply that the industry will see a spike in activity post-recession. That is what took place in the wake of The Great Recession, but there were far fewer funders in play back then. It remains to be seen if the same will occur the next time around.
According to Cefaratti, the total addressable market (TAM) for litigation funding is around $100-$150B, but there’s only around $10B in funding currently being deployed. With a turnover period of 2-4 years, that means only 5% of TAM is being funded at best.
