Last week, Litigation Finance Journal held a special digital event on the evolution of corporate portfolio funding. How has portfolio funding evolved over the years? Why have corporates been slow to adopt the practice? How is COVID impacting that adoption rate? And what can funders do to convince corporates that the benefits of portfolio funding outweigh any perceived drawbacks? A panel discussion led by Ed Truant, founder of Slingshot Capital, addressed these and other questions. The panel consisted of Neil Purslow, Co-Founder of Therium Capital Management, Greg McPolin, Managing Director of Burford Capital, Patrick Molony, CEO of Litigation Capital Management, and Rebecca Berrebi, Founder and CEO of Avenue 33, LLC. Below are some key takeaways from the discussion: Ed: Patrick, can you provide a brief description of the corporate portfolio financing market? Patrick: Sure. This is a part of the market where the litigation financier approaches a large sophisticated and potentially well-capitalized corporate entity, either directly or through another channel—and provides to that corporate a facility in relation to a number of disputes that corporate might have. The capital that’s applied to funding that portfolio of disputes is typically collaterally secured against the outcome of a number of disputes. And through that process, it’s provided to that corporate at a reduced price reflecting the reduced risk of capital. And as you say, it is a part of the market that hasn’t seen a lot of attention from litigation finance, and is something I think the industry is starting to have a close look at now. It’s certainly one of the investment strategy that LCM—the company that I manage—is looking at and focusing on very closely. Greg: The two things I’ll add are that Patrick was right in that the market for corporate portfolio financing is certainly a newer evolution of the Litigation Finance market. For Burford it’s really come into focus over the past 18 months or so. For fiscal year 2020, we noted that about 57% of the capital we committed across our portfolio went to corporations. Not that that all happened in the context of portfolios, but certainly corporates were the majority recipients of the capital that Burford committed in 2020. That’s consistent with what I see in the market, certainly here in the US. That is an increased uptake by corporates of litigation finance, and corporate legal departments and finance professionals coming to realize, after people like Rebecca and Patrick and Neil and I have been out in the market explaining that litigation finance is just another form of corporate finance. Corporates should be looking at their legal assets, those affirmative arbitration and litigation claims as having value—as assets that can be monetized and financed. Ed: Rebecca, through your advisory business you must come across corporations all the time who are looking for some perspective on the litigation finance market. Why do you think corporations haven’t adopted litigation finance sooner? Rebecca: It’s a good question. I think it follows along what Greg said which is—first of all, this market in general, litigation finance, remains relatively new as compared to other types of corporate finance in the world. So I think everybody in this industry recognizes that it’s not a new industry, but still becoming more well-known. I think a large part of it is just education, right? I think a large part of it is that corporates are just beginning to recognize that this type of financing is available to them. So there is a big hurdle in terms of education, but as Greg said, Burford for sure is funding a lot of corporates. I think and expect that that trend will probably continue as more and more corporates become more and more comfortable with the idea of Litigation Finance. Ed: Greg, in terms of those corporates who are looking at litigation funding, what are some typical objections you might hear from corporates? Greg: I think Rebecca made this point, which I think is massively important and that is—this is so much about education, and a mind-shift within corporate legal departments and the CFO suite to think about Litigation Finance as just another form of corporate finance. The number one objection is sort of an unseen one, just lack of awareness...status quo. Treating legal assets the way they were treated years and years ago without thinking about how to bring in Litigation Finance to begin to shift the legal department from a cost center to a profit center. Once you get past that...you come up with the typical objections like...some companies believe, wrongly, that commercial litigation funders are behind many of the litigations that they have to defend. So they don’t feel about using capital from a litigation funder on the affirmative side. Rebecca: I think Greg covered the bulk of what I’ve seen—the emphasis being on ‘we don’t like litigation funders because they fund the people who sue us.’ So I do think there’s a bit of a PR campaign that we as an industry should be working on. That this money is legitimate money that is compliant with all types of rules and regulations. We need to bolster the opinion of what Litigation Finance is, and the legitimacy of what it is. We in the industry know that it’s legitimate, and it’s very real and there are a lot of lawyers now who practice specifically in Litigation Finance law. I also see one thing Greg may have alluded to, it’s hard still to learn about Litigation Funding unless you dig deep and listen to panels like this one. It’s not as mainstream as other types of financing are. So while of course we all know there’s a lot about Litigation Finance in the NYT or Wall Street Journal, it’s definitely not front page news consistently. Ed: Neil, can you comment on the role that law firms play in the decision-making process for corporates. Are they absent or behind the scenes or front and center? Neil: They’ll essentially play the same role litigators would in in originating single case fundings, that’s certainly true. But we’ve certainly seen law firms play a very substantial role in some of these deals. But they won’t necessary litigate because it may well be the corporate folks and the key is going to be people with senior contacts in companies that want to deliver a sort of commercial benefit to the company, and go beyond narrow legal advice. Certainly law firms do play roles, and they can play an important role in bridging the gap between the GC and CFO. Ed: In terms of how corporates approach finding the right litigation funder, Rebecca what’s your experience—are they hiring advisors? Or relying on their law firms to run a process? Can you give us some perspective? Rebecca: I will tell you that I think the way that I’ve heard from corporates historically have been through law firms or people reaching out to me because they are interested in taking on Litigation Finance. But just as a corporate wouldn’t make a big investment in something without having some expertise in house or going outside to find it. I find this is the same thing. I’ve been talking to people who find me to learn how the industry works—‘who do I talk to,’ ‘how do I learn about this.’ On a less frequent basis I get calls from corporates that say ‘I’ve been approached by a funder, what do I do? Is this a good deal? What do these deals look like?’ Sometimes it’s a proactive thing, or they get approached.

Nivalion, Europe´s leading provider of legal finance solutions, announced today that it will acquire the portfolio and know-how of Carpentum Capital Ltd., a Swiss company that has been at the forefront of the development of litigation funding in Latin America, with lawyers on the ground in Argentina, Brazil and Chile. Marcel Wegmüller, Nivalion’s Co-CEO, said: ”Having supported Carpentum over the last years, we are pleased to be stepping into their shoes in offering funding to companies and law firms doing business in Latin America. This transaction is a logical step after having decided to proactively pursue business in the Americas. Litigation funding is growing rapidly in Latin American jurisdictions. With the assistance of the experienced team at Carpentum in these markets, as well as Nivalion’s long-standing and substantial expertise with litigation funding in different markets, we will be perfectly placed to successfully expand our business in that part of the world.” Managing Director of Carpentum, Detlef Huber, comments: ”We are pleased and proud to have helped bring litigation funding to Latin America, and we look forward to supporting Nivalion with its progress in this exciting market.” About Nivalion Nivalion is a Swiss litigation finance provider with offices in Zug, Munich, Frankfurt and Vienna. We focus on funding complex litigation and arbitration disputes in Europe, the Americas and Asia-Pacific, including direct and secondary funding of individual cases, case portfolios and law firms. Our team includes 25 professionals with substantial experience in dispute financing and private practice in leading financial institutions and law firms, offering the financial strength of its Swiss core investors. Nivalion is a member of the International Legal Finance Association (ILFA) and is committed to and compliant with the ICCA Queen Mary Task Force Best Practices, the ILFA Best Practices and the SIArb Third Party Funding Guidelines.

Pretium, a specialized investment management firm with approximately $30 billion in assets, today announced that Tatiana Gutierrez and Jeannette Arazi have joined the firm as Managing Directors on its Affordable Housing and Real Estate Capital Markets teams, respectively.

These appointments underscore Pretium's continued commitment to increasing access to quality, affordable rental housing for households of all price points. The additions of Ms. Gutierrez and Ms. Arazi enhance the depth of expertise, insight, and support Pretium provides for residents, investors, and community stakeholders across its platform. These appointments follow the announcement of the firm's $1 billion build-to-rent investment in partnership with Crescent Communities.

"Welcoming two talented professionals with long track records of success and innovation is an exciting milestone as we grow our team," said Don Mullen, CEO and Founder of Pretium. "Tatiana and Jeannette have made an incredible impact in their respective focus areas, and the experience they bring to Pretium will play a pivotal role as we continue to grow our real estate investment platform, building on the success of our single-family and build-to-rent strategies. We are confident that their additions will further strengthen our leading efforts to set the standard for professional single-family rental ownership. We look forward to their contributions as we continue to invest in our communities and expand our capabilities to bring the benefits of professionally managed single-family rental housing to more American households."

Based in New York, Ms. Gutierrez will be integral to advancing Pretium's social impact goals, including instituting an array of supportive services for residents of all price points and adding to and preserving low-income rental housing stock. Over the course of her nearly 20-year career, Ms. Gutierrez has built a reputation as a leading practitioner focused on the development and preservation of affordable housing across the United States. As a real estate attorney at Nixon Peabody LLP for more than 15 years – including the past eight years as a partner – she represented a wide range of leading for profit and nonprofit developers, syndicators, asset managers, housing authorities and tenant organizations on affordable housing transactions and regulatory issues across the United States. Ms. Gutierrez also has extensive experience in HUD assisted housing programs and has advised on numerous affordable housing and social impact real estate transactions. Ms. Gutierrez currently serves on the board of Women in Housing and Finance, on the Advisory Board to the Real Estate Association for LatinX Professionals, and on the Advisory Council to the National Housing Conference.

"Affordability and social impact continue to play an increasingly important role in today's housing market, particularly in the wake of the pandemic and the important social issues that have been brought to the forefront, as a result," said Ms. Gutierrez. "With almost 20 years of industry experience and recent experience working with the Pretium team, it is clear they are at the forefront of providing quality, affordable housing in neighborhoods of opportunity with a housing product that serves vulnerable populations like large families with children. Having the opportunity to bring my distinct affordable housing experience to Pretium's world class residential real estate platform, I believe I can help bring the benefits of Pretium's professional ownership and management model to those who will benefit from it the most."

Based in Chicago, Ms. Arazi joins Pretium from Sidley Austin LLP, where she worked for the past 22 years, including the last 14 as a partner. Widely known as a leading capital markets advisor and one of the earliest advisors for financing single-family rental housing, Ms. Arazi has extensive experience representing financial institutions in a wide range of transaction types and creating financing solutions tailored to the nuances of unique asset types. She will focus on structuring and executing transactions and strategic financial initiatives firm-wide across Pretium's residential real estate platform and portfolios.

"Having worked closely with Pretium and a number of its team members for almost a decade, I have long admired the firm's vision and commitment to creating a unique residential platform that encompasses both real estate and finance," said Ms. Arazi. "It is a privilege to join the team that serves the evolving needs of today's rental market participants—from renters to communities to investors—and I am excited to contribute to their incredible momentum."

About Pretium

Pretium is a specialized alternative investment management firm focused on U.S. residential real estate, residential credit, and corporate credit. Pretium was founded in 2012 to capitalize on secular investment and lending opportunities arising as a result of structural changes, disruptions, and inefficiencies within the economy. Pretium has built an integrated analytical and operational ecosystem within the U.S. housing, residential credit, and corporate credit markets, and believes that its insight and experience within these markets create a strategic advantage over other investment managers. Pretium's platform has approximately $30 billion of assets under management as of October 1, 2021 and employs approximately 2,500 people across 29 offices. Please visit www.pretium.com for additional information.