Therium’s High-Risk Bets Expose Funding Model Fault Lines
A new report catalogues how marquee investments in the £58 million Post Office settlement and the still-pending $15 billion Sabah arbitration have delivered thinner-than-advertised returns for Therium Capital. Add in 2023’s PACCAR ruling, which re-classified many funding contracts as damages-based agreements and capped recoveries, and the firm’s prospects look increasingly fragile.
An article in Boracay Island News recounts how Therium has scaled back new underwriting, shifted several legacy portfolios to Fortress Investment Group, and is now fighting to salvage returns in Therium v Bugsby—a test case on whether “DBA-style” clauses can simply be severed from legacy deals.
The piece underscores three structural stresses: concentration risk when outsized single matters dominate a fund; regulatory uncertainty post-PACCAR; and the reputational hit when claimant recoveries prove modest once funder multiples and lawyer fees are paid. Industry observers worry that if “grand-slam” cases continue to disappoint, limited-partner appetite for blind-pool capital could tighten, forcing funders to rely more heavily on secondary markets or bespoke co-invests.
For the wider legal-funding ecosystem the story is a sobering reminder: transparency, portfolio diversification, and realistic pricing will be increasingly important in a world of tougher judicial scrutiny and return caps.