Funders Continue Raising Large Capital

The litigation funding boom continues. LionFish (owned by RBG Holdings) recently agreed to a GBP 20 million funding deal. Balance Legal Capital recently raised GBP 130 million for a new fund—tapping eight institutional investors. With this, Balance’s total assets under management have surpassed the GBP 20 million mark.

Legal Futures UK explains that Balance now has access to even more co-investment capital from investors. Robert Rothkopf, managing partner, stated that this is the second multi-investor fund launched in two years. He went on to say that this demonstrates an ongoing and fervent demand for the services the company provides.

LionFish, which is part of RBG Holdings PLC, funds cases run by lawyers outside RBG. Its recent deal with a sizable alternative investment firm means that the firm will fund 75% of all cases over the next two years. LionFish then would be eligible to collect a significant share of returns after the return hurdle is met. This could provide the potential for high returns well beyond LionFish’s initial investment.

LionFish will also have sole discretion on the cases they pursue, and exercise great capital flexibility. This allows the funders a more diversified risk portfolio while moving away from the current investor sales model. Managing director Tets Ishikawa explains that the new arrangement will allow for greater funding investment without returning to deployment-focused management with lower margins.

Burford Capital has made over AU $1.1 billion in new funding commitments, deploying roughly AU $841 million. Case realizations have remained lower than expected, however, due to court delays and stoppages caused by COVID. Still, as Chief executive Christopher Bogart details, writing over a billion dollars in new commitments during a pandemic is an impressive feat. It also bodes well for future returns, as these cases come to fruition.