One of litigation finance’s most attractive attributes as an asset class is its lack of correlation to traditional markets. However, as one leading funder recently pointed out, litigation funding can go even further and benefit from economic downturns due to a correlated rise in litigious activity.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
One of litigation finance’s most attractive attributes as an asset class is its lack of correlation to traditional markets. However, as one leading funder recently pointed out, litigation funding can go even further and benefit from economic downturns due to a correlated rise in litigious activity.
Speaking with City A.M., Therium’s co-founder and chief investment officer, Neil Purslow, offered an optimistic outlook for the litigation funding industry despite the ongoing economic instability. Within the broader surge in litigation due to the economic downturn, Purslow also highlighted that in these difficult market conditions, companies may turn to litigation funders to provide the capital for meritorious litigation that they would struggle to finance given budget constraints.
Purslow pointed to the rise in class action lawsuits in the UK as an area of continued growth for the London market, citing continued interest from investors who see litigation finance as a ‘counter-cyclical investment’ in the current market. In addition to these class action cases, Purslow suggested that ESG litigation could become a significant area of investment for funders, as the scope of this activity has increased to a point where ‘ESG is everywhere’.
