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AIR Asset Management Partners with Kerberos Capital Management to Add Legal Finance Allocation to its Multi-Strategy Product

AIR Asset Management ("AIRAM"), a Chicago-based hedge fund management firm focused on investing in life settlements, annuities, and private credit, today announced its strategic partnership with Kerberos Capital Management ("Kerberos"), a leading private credit asset management firm that specializes in direct lending to law firms. The partnership enables AIRAM to enhance and further diversify its multi-strategy investment product through adding a legal finance asset allocation focused on law firm lending.  "We are excited to partner with Kerberos to offer investors this highly complementary allocation, which aligns with AIRAM's mission to deliver attractive risk-adjusted returns through resilient, non-correlated investment products," said Stephen Luongo, Chief Investment Officer of AIR Asset Management. "The loans Kerberos underwrites to law firms provide AIRAM an attractive value proposition, including reliable interest income that not only contributes to overall returns, but also supports liquidity and risk management. We look forward to leveraging Kerberos' track record, leadership, and deep expertise in law firm lending to expand our private credit mandate." The Kerberos investment team is led by Joe Siprut, who was a nationally recognized attorney prior to founding Kerberos. Kerberos boasts an extensive roster of relationships in the plaintiff's bar and law firm lending space, making it one of the few litigation funders with underwriters that have significant experience from their former capacities as trial lawyers and senior litigators. Its strategy focuses on originating and underwriting loans to law firms that generate success-fee-based revenue by litigating mass tort, class action, and personal injury claims. "I have long admired what AIR Asset Management's CEO Rich Beletuz and his team have built, and we are thrilled to be supporting their expansion into legal finance," said Joe Siprut, Founder, Chief Executive Officer, and Chief Investment Officer of Kerberos. "A clear benefit of our strategy is our uniquely diversified approach, which allows for cross-collateralization, low default rates, and a steady return profile, from which AIRAM's impressive suite of non-correlated offerings is well positioned to benefit. I'm excited to work with AIRAM's talented team of investment professionals as we execute on our shared goal to deliver for our respective investors."*   About AIR Asset Management AIRAM is a rapidly growing SEC-registered hedge fund management firm with $600M in AUM in life settlements, annuities, and private credit investments. The firm has specialized in longevity-linked investing since 2014 and has offered qualified investors the opportunity to access attractive risk-adjusted returns that are largely uncorrelated to traditional asset classes. AIRAM's experienced team of professionals from diverse backgrounds serves an investor base of institutional, registered investment advisers (RIAs), single and multi-family offices, and high net worth investors. About Kerberos Capital Management Kerberos Capital Management is a boutique alternative asset manager that seeks to provide our clients excess return at every point along the risk-reward spectrum with an emphasis on yield, opportunistic, and hybrid strategies. Kerberos' flagship strategy is providing innovative capital solutions to law firms. The depth of our private credit and direct lending platform has enabled us to generate differentiated absolute and risk-adjusted returns in litigation finance markets, regardless of the business cycle or economic environment.
Commercial People Moves

Omni Bridgeway CEO to Retire in October

One of the world’s leading litigation funders has announced a change in leadership, as Omni Bridgeway’s CEO and managing director Andrew Saker stated that he will be retiring and leaving his position on October 26. Mr Saker will end his tenure as chief executive after the company’s annual general meeting, and will continue to support Omni Bridgeway as a non-executive advisor for a further year. The news was detailed by an article in The Market Herald, with Omni Bridgeway announcing that Raymond van Hulst, currently managing director and co-chief investment officer EMEA, will be taking over as CEO following Mr Saker’s departure. Mr van Hulst stated that he was enthusiastic about the “significant opportunities” for the company’s future, and would be looking to continue Mr Saker's “vision of globalization.” Speaking about Mr Saker’s tenure as CEO, Omni Bridgeway’s chairman Michael Kay said that “Andrew and his team have built a truly global platform”, and that Omni “has transformed from a balance sheet funder to a co-investor and manager of non-recourse funds investing in legal assets in eight funds managing approximately $3 billion.”
Announcements Commercial

Litigation Capital Management: Progress on direct balance sheet investment

Litigation Capital Management Limited (AIM:LIT), an alternative asset manager specializing in dispute financing solutions internationally, announces positive progress on an investment forming part of its portfolio of direct investments.

Successful award in investment in arbitration

The Company is pleased to announce a positive development on one of LCM’s 100% direct balance sheet investments which was heard by an ICC International Court of Arbitration tribunal.  A partial award on liability and quantum was granted in favour of the funded party. This means that the funded party has succeeded in the claim and the only matter yet to be determined is the costs award. The Company expects the funded party to also be successful in an award of its costs, however, that costs award does not affect LCM’s interest or its potential returns.

The award is subject to challenge in the court by the respondent. That challenge is not in the nature of an appeal. LCM is confident that the award will be upheld. LCM has invested approximately AUD$ 2.9m (USD $2m) in this arbitral dispute.  The investment performance is protected by a compounding interest rate.

Patrick Moloney, CEO of LCM, commented: “We are pleased with the positive adjudication in this investment. Despite the Respondent challenging the award we are confident that the award will be maintained. In the current uncertain macro-economic environment our direct investments, as well as those made alongside our fund investments, continue to demonstrate the non-cyclical and uncorrelated nature of the returns from litigation funding.

This award is expected to generate a return in line with management expectations”.

Enquiries

Litigation Capital Managementc/o Tavistock PR
Patrick Moloney, Chief Executive Officer
  
Canaccord (Nomad and Joint Broker) Tel: 020 7523 8000
Bobbie Hilliam
  
Investec Bank plc (Joint Broker)Tel: 020 7597 5970
David Anderson 
  
Tavistock PRTel: 020 7920 3150
Tim Pearsonlcm@tavistock.co.uk
Katie Hopkins 

Litigation Capital Management (LCM) is an alternative asset manager specialising in disputes financing solutions internationally, which operates two business models. The first is direct investments made from LCM's permanent balance sheet capital and the second is third party fund management. Under those two business models, LCM currently pursues three investment strategies: Single-case funding, Portfolio funding and Acquisitions of claims. LCM generates its revenue from both its direct investments and also performance fees through asset management.

LCM has an unparalleled track record driven by disciplined project selection and robust risk management. Currently headquartered in Sydney, with offices in London, Singapore, Brisbane and Melbourne, LCM listed on AIM in December 2018, trading under the ticker LIT.

www.lcmfinance.com

Commercial Deals

Brazilian Lawyer Calls for Funders to Support Litigation for Indigenous Communities in the Amazon

Litigation funding is a powerful tool to redress the balance between powerful defendants with vast wealth and resources at their disposal, and claimants who lack the financial resources to fight back. This contrast is often most sharply seen in cases where indigenous communities are fighting for justice against government entities or corporations that have harmed them, who without third-party funding, would be unable to gain access to the legal system. In a new effort to bring justice on behalf of indigenous communities, Daniel Cavalcante, a lawyer from Brazil, is calling on law firms and litigation funders to support lawsuits against large international corporations harming the people and the environment of the Amazon. In a video published to his YouTube channel, Cavalcante describes how indigenous peoples in the region “suffer the most diverse types of violence, prejudice and oppression”. Cavalcante states that this oppression and harm is being conducted both by foreign companies and by state governments, who have perpetrated “a true ethnic-cultural genocide that decimated their habits, customs and traditions”.
Case Developments Commercial

LCM Announces £7MM in Profit from Carillion Litigation Against KPMG

Investments by litigation funders are always a delicate balance between the risk of a lost case against the potentially lucrative returns should the claim be successful. However, as a new announcement by Litigation Capital Management (LCM) demonstrates, backing the right case can lead to impressive financial gains for a funder. Reporting by City A.M. highlights LCM’s announcement early this week, which stated that the funder had achieved a £7 million return in profit from funding a claim by Carillion’s liquidator against KPMG. The claim that LCM had originally financed in 2021, involved the liquidator filing a lawsuit against KPMG for its failure to competently audit Carillion’s accounts, which had subsequently led to the collapse of the company in 2018.  KPMG had announced last week that it would be settling the case, without disclosing the settlement figure publicly. However, LCM had invested £5.2 million into the lawsuit and with an overall financial return of £12.5 million, resulting in the stated £7 million amount in profit.  LCM’s chief executive, Patrick Moloney, stated that the capital for the investment had been sourced from pension funds in Europe and the US, as well as investment banks and university endowments.
Case Developments Commercial

Harcus Parker Leading Group Litigation Against UK Energy Suppliers

As everyday consumers around the world struggle with rising prices and constrained income, it is no surprise that there is significant interest in litigation representing these consumers against corporations who abuse their power. In the UK, a new group litigation effort looks to take on Britain’s energy companies for their practice of paying brokers to attract new customers and then secretly passing on the cost of those broker fees to these customers. An article by Express & Star covers the news that Harcus Parker, a London-based litigation firm, is reaching out to companies, charities, schools and other organisations who may have been affected. The group litigation focuses on the allegation that energy firms paid ‘secret commissions’ to third-party brokers or introducers, who encouraged customers to sign up with these energy suppliers and then effectively forced the customer to cover these costs by increasing their energy bills. Harcus Parker’s senior partner, Damon Parker, stated that consumers have been unknowingly footing the bill for these practices, with energy suppliers and outside brokers having failed to disclose the existence or amount of these payments. Harcus Parker has stated that it has secured over £10 million in litigation funding to fight the case, and has estimated that the total compensation owed by these energy companies could exceed £2 billion. Potential claimants can contact Harcus Parker through its website.
Case Developments Commercial

Woodsford Funds Class Actions Against Hyundai and Kia in Australia

As class actions continue to gain interest and investment from the litigation funding industry, the automotive sector remains an area full of opportunities, with consumers empowered to bring claims against manufacturers accused of malpractice or deceptive behavior.   Reporting by WhichCar details that multiple class actions have been brought against Hyundai and Kia in the Federal Court of Australia, with the claims alleging that they sold vehicles to consumers that had defective engines with serious faults. The actions, which are being represented by Johnson Winter Slattery and funded by Woodsford Litigation Funding, cover sales of vehicles from 2011 to the present and includes over 20 separate models of car between the two carmakers, with a potential of almost 195,000 cars being affected by these issues. Charlie Morris, chief investment officer at Woodsford, stated that the class actions were designed to ensure these companies face accountability and that the consumers affected can receive adequate financial compensation. Robert Johnston, a partner at Johnson Winter Slattery, emphasised that Kia and Hyundai’s actions specifically harmed Australian consumers, as they were aware of the issues and even recalled vehicles with similar defects in other countries. Hyundai stated that it “stands by the integrity and reliability of its vehicles”, whilst Kia did not respond to WhichCar’s request for comment.
Commercial Regulatory Issues

DAF Appeal in UK Supreme Court Could Endanger Third-Party Funding

As the European Union considers proposals for enhanced regulation and oversight of third-party litigation funding on the continent, there has been much speculation that the UK’s litigation finance industry could benefit from representing a more welcoming market. However, an ongoing appeal by the defendant in two group claims has the potential to disrupt the status quo of litigation funding in the UK, and create major problems for funders operating in the country. An article by Reuters provides an update on the appeal by truck manufacturer DAF, which is now set to be decided by the UK’s Supreme Court. DAF’s has been appealing two lawsuits brought by two groups of truck owners at the Competition Appeal Tribunal (CAT), which allege that that company took part in a cartel that fixed prices and slowed the progress of engine technology that reduced harmful emissions. DAF’s appeal centers around the argument that the claimant groups engaged in funding agreements that fail to comply with regulations that outline the parameters of damages-based agreements. DAF’s lawyer, Bankim Thanki, argued that the Supreme Court should not consider any effects on the wider litigation finance industry, as they are irrelevant to the validity of the appeal. However, the Association of Litigation Funders (ALF) has argued that if the court upheld the appeal on these grounds, then it would put the UK litigation funding industry “in a state of disarray”. The Royal Haulage Association (RHA), which brought one of the original cases against DAF, has highlighted that by permitting the defendant’s appeal, the court would seriously endanger every single collective proceeding in the UK, which all involve funding agreements.
Commercial Deals

Westfleet Advisors Release 2022 Litigation Finance Market Report

As noted in the recent GAO report, there is a distinct lack of publicly available data about the litigation funding industry, which has contributed to the lack of awareness and understanding of the practice by policymakers and legal professionals outside of the industry. However, a new report by Westfleet Advisors provides new insights into the most recent state of the market, and offers some interesting takeaways as to the current direction of litigation finance in the U.S. Westfleet Advisors’ 2022 Litigation Finance Market Report provides an overview of the American third-party funding industry, highlighting that the market continues to demonstrate strong growth, as new capital commitments from funders grew by 16% last year, to reach a total of $3.2 billion. Not only has the scale of new commitments continued to grow, but the average size of these investments has also risen to $8.6 million per transaction. Interestingly, the percentage of client-directed deals has dropped down to 31%, as lawyer-directed deals have become the dominant deal type, reversing the trend of 2021 which saw a near 50/50 split between client and lawyer-directed deals. Given the regularity with which patent litigation dominates the headlines for litigation funding, 2022 actually saw a decline of that market share down from 29% in 2021 to 21% last year. Westfleet suggests that this outsized representation of patent litigation cases being funded in 2021 may have been the result of several portfolio funding deals for patent lawsuits. More insights into the U.S. litigation finance market can be found in the full report.