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Siltstone Capital Raises New Litigation Finance Fund To Invest In Patent, Energy & Commercial Opportunities.

Siltstone Capital, LLC (“Siltstone”), a Houston, Texas based investment and advisory firm, announced the successful closing of SC Litigation SPV, LP (the “Fund”). Siltstone, through its subsidiary Litigo Financial, LLC (“Litigo”), will invest in commercial, patent, technology, and other business litigation finance opportunities that the firm sees on an increasing basis.

Mani Walia, Managing Director and General Counsel, leads the Fund’s efforts and noted, “While we are a newer player in the industry, we have reviewed hundreds of investment opportunities through a rigorous diligence process that reflects the technological, investment, and legal expertise of the team. We are humbled to partner with deserving plaintiffs and trial lawyers from the country’s top law firms.”

Founded in 2013, Siltstone invests in organically sourced niche opportunities that provide downside protection along with significant upside potential. Robert Le, Co-Founder and Managing Partner, commented, “We are grateful for the continued support from our limited partners, as we believe litigation finance is an emerging institutional asset class. To prepare for that growth, we have built a best-in-class team with a rare combination of investment acumen and legal expertise, which positions us to offer compelling returns to leading institutional investors that seek uncorrelated exposure in a volatile market.”

Siltstone is excited to host LITFINCON, an inaugural litigation finance and legal private credit conference to be held in Houston Texas on March 2-3, 2022. LITFINCON will showcase a diverse mix of speakers, panel discussions, and case studies designed to provide current data on deals, regulatory changes, and investment trends in litigation finance. To attend, please visit http://www.litfincon.com for registration details.

To learn more information about Siltstone Capital and Litigo Financial, please visit http://www.siltstonecapital.com and http://www.litigofinancial.com, respectively. You can also follow LITFINCON and Litigo Financial on LinkedIn and Twitter.

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Commercial

Podcast: Litigation Funding in Canada 

Paul Rand, Omni Bridgeway’s Chief Investment Officer, is joined by Andrew McCoomb and Ailsa Bloomer in a podcast feature discussion on the current litigation finance trends in Canada.  NortonRoseFulbright.com explains that litigation finance is an established practice in the United States and United Kingdom, and is starting to see an increase in business across Canada. The podcast also featured Arad Mojtahedi, who is an associate insolvency practitioner managing proceedings under the Canadian Companies’ Creditors Arrangement Act.  Listeners of the podcast qualify for CPD credits in Ontario and British Columbia.
Commercial Deals

When Will Litigation Finance Enter Africa? 

In Africa, there are 340 money agents per 100,000 people. Yet, only six ATMs per 100,000. With the continent yet to embrace any real ambitious litigation finance marketplace, the question remains if a new form of business such as litigation funding can sweep across Africa.    Simon-kucher.com’s new report on banking in Africa outlines the pivotal role mobile money has played in innovation of the continent’s banking sector. Similarly, money agents offer financial services including taking deposits, cashing out funds and facilitating transactions. The report suggests that the future of litigation finance in Africa consists of building strong litigation investment portfolios.  The value in African litigation finance lies in capturing premium cases in key markets. Also, international human rights litigation can be acted upon simultaneously in large Western markets (like New York State). For example, a human rights claim of a large bank in New York who had potentially violated human rights in Kenya could be a segway into building a strong ligation investment portfolio in Africa.  There are many barriers to entry for litigation funders in Africa, but as the report notes, there is opportunity as well.
Commercial

Burford Blames COVID for $80 Million Loss

COVID has adversely impacted most industries, and litigation funding is no exception. While new commitments and deals are up from last year, cases are simply not concluding in a timely manner. Sharecast explains that Burford has predicted an annual net loss of AU $70-80 million. Burford maintains that the loss is due to timing, and not any other factor. CEO Christopher Bogart explains that performance has been strong, and that the value of the company’s portfolio has not diminished. Thus far in 2022, Burford shares have fallen 15%.
Commercial Fundraising

LionFish Enters Funding Deal with Unnamed Investor

RGB Holdings has announced that its legal funding arm, LionFish Litigation Finance, has entered into an agreement with a sizable alternative investment firm.  Law Gazette explains that the new arrangement is expected to provide LionFish with significant capital—allowing for a more diversified portfolio of risks while moving away from the investor sales model—this according to a statement released to the London Stock Exchange. Nicola Foulston, RBG Holdings Chief Executive, says that the arrangement represents a significant step forward in the long-term growth of LionFish. Managing director Tets Ishikawa explains that the deal increases litigation investments without relying on antiquated, lower-margin models. RBG Holdings shares rose to 126.35p following the announcement.
Commercial

Omni Bridgeway Explains the Maturation of Litigation Funding

The Litigation Finance industry began as a way to increase access to justice, funding David v Goliath cases and giving average citizens a chance to have their day in court. Legal funding still does that—and so much more. Market Screener shares an interview with Jim Baston and Matthew Harrison, co-chief investment officers of US operations at Omni Bridgeway, as they discuss how the industry is maturing. Assets under management doubled between 2017 and 2020 according to the ILFA. Harrison explains that the trend has been increasing numbers of entrants into the marketplace. New funding entities are raising fresh capital and entering the market, creating niche opportunities for lawyers and investors. Hedge funds have gotten in on the fervor, as have university endowments, pension funds, and others. As competition increases, so have adaptations, as new funders decide on specialties and formulate business plans based on specific client sizes or case types. Flexibility in funding models has also increased—which is good news for those seeking funding. Laws governing litigation funding are also changing. Disclosure rules are a big topic of discussion, as jurisdictions increasingly impose or suggest rules requiring that courts be informed of the existence of third-party funding. At the same time, some courts are rejecting these disclosure requirements, finding that most litigation funding agreements aren’t relevant to the facts of the cases at hand. Baston details that there is an acceleration in the advances in Litigation Finance, largely due to the pandemic and the stressors it brought about. More companies than ever are interested in Litigation Finance, either as an investment or as a useful tool to manage risk. These days, the top 10 law firms in the country are interested in Litigation Finance. This wasn’t true even a decade ago.
Commercial Fundraising

First of Its Kind Litigation Finance Stock Offering

Litigation Finance has taken the investment world by storm. Mechanisms to vet cases are always improving, and the industry has adapted to changing circumstances. The problem? As a maturing asset class, Litigation Finance is typically only available to wealthy investors. Thanks to a startup from partners Roche and Freedman, that has changed. ABA Journal reports that retail investors can buy a share in a federal lawsuit filed by hemp growers. The minimum investment is only $100. The risks to investors are substantially lower than those typically endured by third-party funders. In the case, known as Apothio, hemp growers allege that the government illegally disposed of at least $1 billion in hemp crops in California. There’s a possibility that the case will be dismissed. If that happens, investors will see 80% of their investment returned. If the case succeeds, investors may see as much as a 350% return. Funds deployed to the Apothio case are provided on a non-recourse basis. So if the case goes to trial and loses, investors lose their entire investment—as is typical of litigation funding agreements. Are there downsides for consumers? Obviously, any investment carries risk. Litigation as an investment can be perilous, and many laymen lack the knowledge and experience needed to vet legal investments effectively. One professor at Indiana University applauds the laudable efforts of Roche and Freedman, but they worry that new investors won’t understand the intricacies of their investment, leaving them unable to make informed decisions. This would include background info and a summary of underlying legal issues. Roche’s team is developing new methods of explaining case data to investors in a manner that is easily digestible for those without legal expertise. The Apothio case was filed in the Eastern District of Columbia in 2020. Motions to dismiss are pending.
Commercial People Moves

Mary Gangemi Becomes Board Member of LCM

Litigation Capital Management has appointed its Chief Financial Officer to its board this week. Mary Gangemi, who joined the company in April 2020, was promoted as a board member, effective immediately. London South East reports that Gangemi has extensive experience in wealth and asset management, and has provided financial oversight to multiple corporations across the UK, Europe, and Asia. Gangemi is working with Chief Executive Patrick Moloney in LCM’s London office. This brings LCM’s executive team into a single hub. Note--an earlier version of this article stated that Mary Gangemi was appointed as Chief Financial Officer.  That is incorrect.  Mary Gangemi was already CFO, and was appointed to the board.  We regret the error.
Commercial

Key Factors to Consider When Seeking Legal Disbursement Funding

Identifying a reliable legal disbursement funder can be a minefield, especially if you aren’t sure what to look for. Most funders want to know a lot about your business. This should include case origins, fee structuring, risk appetite, and a track record of success. Legal Futures explains that funders should also want to look at your company’s recent financials and predictions for the coming year. Funders should also ask about existing loans, liquidity, and working capital. From a client perspective, there are a few questions everyone seeking disbursement funding should ask:
  • How is the funder’s track record and experience?
  • Where are the funds coming from—funders of outside investors?
  • Can I understand the terms? Are they reasonable?
  • Is the process clear and easy to navigate?
Asking the right questions and knowing what to be aware of will make the search for legal disbursement funding easier and more effective.