NEW YORK (March 10, 2020) – Litigation funder Validity Finance announced two noteworthy additions to its investment team in New York and Chicago. Joshua J. Libling, an experienced commercial and appellate lawyer joins Validity from Boies Schiller Flexner. He becomes a portfolio counsel in New York. Also arriving is James Amend, a renowned patent trial lawyer, mediator and former partner at Kirkland & Ellis. Mr. Amend becomes a senior investment advisor based in Validity’s Chicago office. As portfolio counsel, Mr. Libling will help identify, vet and oversee litigation investments in stand-alone lawsuits and law firm portfolios of hybrid contingency cases. With a broad background in complex commercial disputes, Mr. Libling was involved in some of Boies Schiller’s highest-stakes cases including plaintiff and defendant-side actions at all levels of the federal courts. As former Pro Bono Coordinator at Boies Schiller, he also bolsters Validity’s commitment to high ethical standards in dispute funding, including cases with claims related to social justice and exoneration. A magna cum laude graduate of New York University School of Law, Mr. Libling clerked for two federal judges: Judge Chester Straub of the Second Circuit Court of Appeals, and Judge Kenneth Karas of the Southern District of New York. “We’re thrilled to have a lawyer of Joshua’s caliber join us,” said Validity CEO Ralph Sutton. “He brings outstanding trial experience in big-ticket commercial disputes and is an expert at case evaluation. His commitment to social justice cases while at Boies Schiller suits him admirably for our client-first approach to funding.” Julia Gewolb, Validity’s Head of Underwriting, worked with Mr. Libling at Boies Schiller for several years and added “Josh brings substantial case experience and understands the key milestones over the life of a litigation matter. I know firsthand how much analytic and strategic strength he will add to our underwriting process.” The addition of Mr. Amend reflects a growing pool of complex patent disputes under consideration for funding by Validity. In addition to his three-decade tenure as a Kirkland partner, Mr. Amend served as chief mediator for the United States Federal Circuit Court of Appeals from 2007 to 2013. In that role, and in subsequent years as a JAMS neutral, he has mediated over 600 patent and intellectual property cases. Mr. Amend also authored the federal judges’ patent treatise, Patent Law – A Primer for Federal District Court and Magistrate Judges (Eds. 1998 and 2006). “Few practicing lawyers — or judges for that matter — have the breadth and depth of courtroom experience Jim brings to Validity,” reports Validity CEO Ralph Sutton. “We are exceptionally fortunate to have his help reviewing the expanding opportunities we’re seeing in the intellectual property area.” Surge in Cases for Funding The U.S. market for litigation finance continues to grow at a healthy pace. Validity has screened over 650 potential matters since its launch in June 2018, including over 150 patent opportunities. Validity’s acceptance rate for investments remains under 5%, however. These investments include commercial lawsuits, arbitrations (domestic and international) and law firm portfolios, as well as asset enforcement matters. “We suspected there would be significantly more demand for dispute funding than we’d seen previously when we entered the market in 2018. But we’ve been pleasantly surprised by the strong uptick in funding requests in each subsequent quarter,” Mr. Sutton said. He noted the firm reviewed over 120 new cases in the fourth quarter of 2019 alone. Overall, Validity has reviewed cases from 30 states and 20 countries internationally. “We’re pleased with the steady advance of the firm, especially the robust bump in investment opportunities after just 18 months from launch,” Mr. Sutton said. “Our call-out message that litigation finance must focus on clients and building trust has clearly resonated with the market. We’re committed to using our capital to expand equal access to the civil justice system and look forward to supporting more worthy cases in 2020.” About Validity Validity is a commercial litigation finance company that provides businesses, law firms and individuals with non-recourse financing for a wide variety of commercial disputes. Founded in 2018 with $250 million in financing, Validity believes that capital and legal expertise combine to help solve legal problems on behalf of clients. Validity’s’ mission is to make a meaningful difference for clients by focusing on fairness, ethics, innovation, and clarity. For more, visit www.validity-finance.com.

Litigation Capital Management Limited (AIM:LIT), a leading international provider of litigation financing solutions, is pleased to announce the first close of a new third party fund of up to US$150 million, LCM Global Alternative Returns Fund (the Fund). In accordance with the Company’s strategy and as previously communicated to the market, the close of this Fund marks LCM’s return to managing third-party funds, following the building of a permanent source of balance sheet capital through the equity markets. Managed by LCM, the Fund will supplement the deployment of capital from LCM’s own balance sheet, significantly increasing its ability to invest in new opportunities in line with its stated strategy. The Fund will target global dispute finance investments including both single disputes and corporate portfolio transactions, further detail on the investment pipeline is set out below. Fund participants

• The Fund’s cornerstone investors include firstly the large endowment of a US University and secondly, the asset management division of a large global investment bank. Both have extensive experience of investing in the litigation finance asset class and entrenched rights to participate in future funds raised by LCM, demonstrating their commitment to LCM and also to the asset class more widely.
• Three further participants in the Fund include: a further US-based university endowment, a Swiss-based fund manager specialising in investing in litigation finance and a substantial European family office with significant investment experience in litigation finance.

Structure

• The Fund will co-invest with investments from LCM’s balance sheet on a 75:25 basis
• LCM’s balance sheet contribution (25%) will be invested and advanced on a monthly basis over the term of each investment, no upfront contribution will be required
• Performance fees will be payable to LCM as fund manager on the basis of a deal by deal waterfall
• In addition to receiving its 25% share of any profit from each investment from its co-investment, for the provision of its management services LCM will also receive:

-        25% of profit on each Fund investment as and when it matures over a soft return hurdle (full catch up) of 8%; and -        an outperformance return of 35% for all Fund returns over an IRR of 20%.

• The Fund has a term of six years including an inception period of two years during which investments can be entered into (the Inception Period)

The Fund as at first close has raised US$140 million, leaving a balance of up to US$10 million to be raised in due course. The decision to hold a first close of the Fund before all commitments were ready to be made, was driven by a strong pipeline of quality investment opportunities with which the Fund could be seeded. The Fund will be seeded with nine single-case investments which include international arbitrations, class actions, commercial litigation and investor state treaty claims. These investments are not being seeded from LCM’s existing balance sheet portfolio which it will continue to manage. The total capital commitment of the seeded investments amounts to approximately US$33 million representing a total commitment of 22% of the Fund upon inception. LCM is confident that the Fund will be fully committed comfortably inside the two-year Inception Period. Patrick Moloney, CEO of LCM, commented: “The entry into this external fund provides a significant increase to our available capital and a boost to our investment capability, enabling us to broaden and accelerate the expansion of our portfolio with a view to ultimately delivering greater returns for shareholders. “It also constitutes the first step towards LCM operating a funds management business. Indeed, future funds will be underpinned by the entrenched rights of our cornerstone investors. “It is testament to our disciplined approach and track record that the Fund attracted such significant international investment in the sector, giving us scope to accept investment from only the very best and most experienced global providers of third-party capital into the asset class.” Nick Rowles-Davies, Executive Vice-Chairman of LCM, added: “The fact such high-calibre investors have insisted upon entrenched contribution rights in future funds is a very valuable endorsement of LCM’s ability to attract blue chip investment capital on a global scale. “We are delighted to welcome our new partners and look forward to working closely with them to capitalise on the growing number of attractive opportunities available in the global litigation finance space.” Further updates with respect to the Fund commitment and its performance will be made as appropriate. LCM Contact: Angela Bilbow Global Head of Communications abilbow@lcmfinance.com +44 (0)7469 816818 NOTES Litigation Capital Management (LCM) is a leading international provider of litigation financing solutions. This includes single-case and portfolios across; class actions, commercial claims, claims arising out of insolvency and international arbitration. LCM has an unparalleled track record, driven by effective project selection, active project management and robust risk management. 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

TORONTO , March 5, 2020 /CNW/ - Equitable Bank, Canada's  Challenger Bank™, is pleased to announce it acted as the sole lead arranger of a $60 million senior secured credit facility to support the recapitalization and growth of BridgePoint Financial Services Inc. (BridgePoint), Canada's leading provider of specialized loans for the legal services market with a focus on loans to individuals involved in personal injury claims and loans/credit facilities to law firms.

"BridgePoint is a leader in Canada's litigation finance industry and their long track record of high performance makes them an outstanding partner," said Andrew Moor , President & CEO of Equitable Bank. "As Canada's Challenger Bank this credit facility was attractive to us as it is non-market correlated and includes a diverse portfolio of secured assets in an area not typically well-served in Canada ."

"We are very excited to partner with Equitable," said John Rossos , Co-Founder & Principal of Bridgepoint. "Our business is not a traditional lending business and it is difficult for conventional banks to understand what we do and how we do it. Equitable has a dynamic view of the market and has demonstrated its ability to offer innovative solutions. This partnership will enhance our ability to facilitate access to justice for our clients."

This partnership highlights Equitable Bank's latest achievement by its growing Specialized Finance group and demonstrates how it continues to challenge traditional banking. In the spirit of creating unique opportunities that generate value for Canadian businesses, Equitable Bank's Specialized Finance group focuses on offering secured financing solutions to specialty lenders to finance their growth.

About Equitable Bank

Equitable Bank is a wholly-owned subsidiary of Equitable Group Inc. (TSX:EQB and EQB.PR.C) (Schedule I Bank regulated by the Office of the Superintendent of Financial Institution) with total Assets Under Management of over $33 billion . The Bank serves retail and commercial customers across Canada with a range of savings and lending solutions, offered under the Equitable Bank, EQ Bank, and Equitable Trust brands.

The Bank's commercial lending business consists of Conventional Commercial, Insured Multi-unit Residential, Specialized Financing, and Equipment Leasing assets.

The Bank's retail lending business consists of Alternative Single Family Lending, Prime Single Family Residential, and its decumulation businesses.

To learn more, please visit equitablebank.ca.

About BridgePoint Financial Services

BridgePoint Financial Services Inc. is Canada's leading provider of litigation financing solutions designed to meet the specialized needs of plaintiffs, lawyers and the experts involved in advancing legal claims. BridgePoint's goal is to level the litigation playing field and to protect its clients' rights to full and fair access to justice.

SOURCE Equitable Bank

The following article is part of an ongoing column titled ‘Investor Insights.’  Brought to you by Ed Truant, founder and content manager of Slingshot Capital, ‘Investor Insights’ will provide thoughtful and engaging perspectives on all aspects of investing in litigation finance.  Executive Summary

• Modern Portfolio Theory (MPT) - a mathematical framework based on the “mean-variance” analysis - argues that it's possible to construct an "efficient frontier" of optimal portfolios offering the maximum possible expected return for a given level of risk
• MPT states that assets (such as stocks) face both “systematic risks” - market risks such as interest rates - as well as “unsystematic risks” - mostly uncorrelated exposures that are characteristic to each asset, including management changes or poor sales resulting from unforeseen events
• Post-modern Portfolio Theory (PMPT) adds a layer of refinement to the definition of risk
• Diversification of a portfolio can mitigate the impact of unsystematic risks on portfolio performance - although, it depends on its composition of assets
• Behavioural Finance (BF) introduces a suggestion that psychological influences and biases affect the financial behaviors of investors and financial practitioners, also applicable to litigation finance

Slingshot Insights:

• Portfolio theory is important to the commercial litigation finance asset class due to its inherently high level of unsystematic risks
• Slingshot’s Rule of Thumb: a portfolio should contain no less than 20 investments in order to provide the benefits associated with portfolio theory
• Diversification is critical for every fund manager
• Specialty fund managers may play a positive role in a comprehensive litigation finance investing strategy by assisting with meeting a particular performance objective when defined in the context of acceptable “mean-variance” targets
• Diversification provides optionality for an under-performing manager to ‘live to fight another day’ if their first fund achieved sub-par performance
• Portfolio theory is applicable to consumer litigation finance

For those new to the commercial litigation finance sector, one aspect worth discovering from an investment perspective is the existence of unique risks attributable to this asset class.  For investment managers looking to get started in the industry, it is critical to understand the implications of the risks inherent in the asset class, especially for those with a limited track record in litigation finance.  Accordingly, significant attention should be paid to portfolio construction and diversification, in particular during the early stages of the life cycle of an industry where investments possess both idiosyncratic and binary risk, and where there is much less empirical data to guide investment decisions.  Portfolio risk is generally influenced by three main factors: volatility of results, correlation (of outcomes within a given portfolio) and the size of the portfolio.  For the purposes of this article, I have assumed that correlation within a portfolio is non-existent, as each case stands on its own and is not influenced by others in the portfolio. However, to the extent correlation does exist, it can have a significant impact on the value of portfolio theory.  As the industry evolves so too will its data requirements When the litigation finance industry first originated, the concept of portfolio theory was less important, given the recognition within the industry of a requisite level of experimentation (i.e. risk) to be assumed in order for a conclusion to be drawn about the attractiveness of the asset class. Therefore, the industry attracted the appropriate level of risk capital correlating to the risk/reward promise of litigation finance.  As the asset class matures and managers prove out the return profile, the early risk money is being supplemented with institutional capital, which is less inclined to assume the same level of risk as that of high net worth and family office investors.  Accordingly, in order to attract such capital, an element of data and analysis will need to be captured and compiled to assist the investor in understanding the dynamics inherent in the industry (returns, duration, volatility, correlation, etc.), which is partly why I believe the concepts in this article will grow increasingly significant in the near future. Portfolio Theory Concepts Before we discuss the applicability of portfolio theory to litigation finance, let’s dig into some portfolio theory concepts. While an in-depth study into portfolio theory is beyond the scope of this article, the following will provide readers with some theoretical concepts that have been developed and refined over the last 70 years.  Multitudes of research studies and articles have been published over the years and are publicly available.

1. Modern Portfolio Theory (“MPT”)

Modern Portfolio Theory was developed by Harry Markowitz and published under the title “Portfolio Selection” in the journal of Finance in 1952, and remains one of the most important and influential economic theories dealing with finance and investment.  In essence, the theory suggests that investors can reduce risk through diversification.  Risk, in the context of modern portfolio theory, is the concept of the standard deviation of return as compared to the average return for the markets.  The theory states that the risk for individual stock returns has two components: Systematic Risk – These are market risks that cannot be diversified away. Interest rates, recessions and wars are examples of systematic risks in the context of public equities. Unsystematic Risk – Also known as "specific risk," this risk is specific to individual stocks, such as a change in management or a decline in operations. This kind of risk can be diversified away as one increase the number of stocks in one’s portfolio. It represents the component of a stock's return that is not correlated with general market moves. One of the limitations of MPT is the fact that it assumes a normal distribution of outcomes in the shape of a ‘normal bell curve’, which may be applicable for markets where there is perfect information, but not applicable to many private market investments where there is a meaningful information asymmetry among market participants (thereby resulting in skewed performance distributions and potentially heavy tails).  Essentially, MPT is limited by measures of risk and return that do not always represent the realities of the investment market. Nonetheless, it laid the foundation for additional theories which have served to refine the original, underlying one.

2. Post-modern Portfolio Theory (“PMPT”)

The term ‘post-modern portfolio theory’ has its roots in research undertaken at the Pension Research Institute at San Francisco University in 1983, and was created in 1991 by software entrepreneurs Brian M. Rom and Kathleen Ferguson, in order to differentiate the portfolio-construction software developed by their company from those provided by traditional MPT.  The PMPT theory uses the standard deviation of negative returns as the measure of risk, while MPT uses the standard deviation of all returns as a measure of risk. The authors determined that the normal distribution curve which represents the basis for MPT does not accurately reflect all markets and is merely a subset of PMPT. Essentially, different than MPT which tends to focus on risk in the context of derivation from mean market returns, PMPT focuses on risk and reward relative to an expected Internal Rate of Return (“IRR”) required for a given set of risks, which is more of a risk-adjusted return philosophy.  However, a key limitation of both MPT and PMPT is that they are both premised on the assumption of efficient markets, being the theory that all participants in a market have the same access to information. Enter Behavioural Finance…

3. Behaviour Finance (“BF”)

I think we can all agree that most financial markets are anything but rational, which means there must be something else influencing their behaviour and, hence, their performance.  Behavioural Finance is a conceptual framework to study the influence of psychology on the behavior of investors and financial analysts. It also recognizes the subsequent effects on markets. BF focuses on the fact that investors are not always rational, have limits to their self-control, and are influenced by their own biases.  BF believes that investors are subject to a variety of judgment errors or biases, which are broadly defined as Self-Deception (you think you know more than you do), Heuristic Simplification (information processing errors), Social Influence (how our decisions are influenced by others) and Emotion (your mood’s impact on rational thinking at the time of investment).  The applicability of BF cannot be overstated in the context of litigation as there is the potential for many biases to enter the decision-making process, especially by litigators who’s own experience may be impacting their decisions. While many theories exist to explain market behaviour and how investors should position their portfolios to address risk, I have focused on the three above as they are among the most prominent.  While they serve as a guide to address risk in the context of portfolio construction, they also serve to highlight an investor’s inherent limitations, and give rise to questions litigation finance managers should be asking themselves: are my biases working their way into my portfolio construction?  Of course, much of the research on which these theories are predicated relate to the public equities marketplace, which simplifies analysis via transparency and quantum of data.  In the context of litigation finance, we have a private market which is not large and not very transparent.  In addition, it is a market that is very inefficient due to the confidential nature of litigation - because it is a private market - and due to its relative nascency.  This is, in part, one of the reasons that I am presently pursuing the Slingshot Data Project (more to come in future articles) through a “Give to Get” model, where value (in the form of analytics) will be provided to a variety of participating constituents.

Application to Commercial Litigation Finance

Before we can discuss the application of portfolio theory to commercial litigation finance, it is important to determine the risks that are inherent in the asset class. The litigation finance asset class exhibits a significant number of unique risks, some of which are Systematic and others Unsystematic, and some which fall into both categories.  As an example of a dual risk, collectability risk is inherent in any piece of litigation where one party is suing another (i.e. a Systematic Risk). In addition, there is the specific collection risk associated with a given defendant (are they more likely to settle and pay quickly, or delay, appeal and negotiate a settlement over a protracted period of time), which may be higher or lower than the overall risk inherent in litigation (i.e. an Unsystematic Risk)). Generally, I find the level of Unsystematic risks to be high in litigation finance given that the outcome of each case is idiosyncratic to the aspects of the case (case merits, credibility of the witnesses, the credibility of professional witnesses, the litigious nature of the defendant, legal counsel effectiveness, defense counsel effectiveness, judiciary effectiveness, jurisdiction and collectability – to name some of the more significant risks).  However, litigation finance also has a number of Systematic exposures (binary outcomes, duration, liquidity, counter-party, collectability, case precedent, regulatory, legislative, etc.) which may not be fully addressable through the application of portfolio theory. With respect to the influence of binary risk, I would add that while each case possesses binary risk at the outset, very few cases in fact are determined by a judicial decision (as with most litigation, the vast majority of cases are settled out of court). So, while binary risk (a Systematic risk) is endemic to the asset class, its application - in particular in the context of a portfolio - should not be overstated, because it rarely influences the performance directly - unless there is a series of highly correlated cases embedded in a portfolio (although the threat of a judicial outcome is a significant factor in any settlement).  In addition, certain case types have a higher propensity to be settled via a judicial decision (e.g. International Arbitrations) as opposed to others (e.g. Breach of Contract). Having said that, if one is only looking at the tail end of a portfolio, binary risk can be disproportionately higher, as those cases within the tail likely have a higher probability of being decided by a judiciary simply because they have had longer case durations which may indicate that neither side is willing to negotiate a settlement, or that the case is heading toward a trial decision. This proves that correlations – and thereby a degree of diversification – are not constant across a spectrum of case distributions. In the second part of this article, which can be found here, I apply the portfolio theories outlined above to the commercial litigation finance marketplace and offer some perspectives on responsible portfolio construction. Slingshot Insights Investing in a nascent asset class like litigation finance is mainly about investing in people.  Most managers simply don’t have the track record of a fully realized portfolio on which investors can base their investment decision.  Accordingly, much time and attention is spent on understanding how managers think about building their business and in particular their first portfolio.  In addition to the underwriting process, one of the most important considerations for investors to understand is how managers think about portfolio construction and diversification. Portfolio theory plays an integral role in terms of how managers should be thinking about constructing their portfolios from the perspective of the number of cases in the portfolio, but managers should also ensure their own personal bias is not entering into the portfolio and that they have thought about all of the systematic risks that can affect like cases. My general rule of thumb is that most first time managers should be targeting a portfolio of at least 20 equal sized commitments, appreciating that it is almost impossible to achieve equal sized deployments due to deployment risk. It is also not in the manager’s best long-term interest to take a short-cut on diversification for expediency sake (i.e. to raise the next larger fund) and to do so may be interpreted as poor judgment from an investor’s perspective! As always, I welcome your comments and counter-points to those raised in this article. Edward Truant is the founder of Slingshot Capital Inc. and an investor in the consumer and commercial litigation finance industry.

DOHA, Qatar, Feb. 27, 2020 -- The Swifthold Foundation, which was defrauded by Sheikh Fahad bin Ahmad bin Mohamed bin Thani Al Thani and his Qatari company, Fast Trading Group, has been patiently waiting for the Qatari Enforcement Court to enforce Swifthold's $6 billion U.K. High Court Judgment since the Qatari Trial Court issued a Writ of Execution to formally recognize the Judgment in Qatar in the Summer of 2019. Upon the Writ of Execution being issued, the Qatari Enforcement Court informed the Foundation on July 4, 2019 that it would begin to contact various Qatari governmental agencies and financial institutions to commence the seizure of the defendants' assets in satisfaction of the Judgment. However, according to Delta Capital Partners, the American litigation finance and support firm that the Foundation has retained, the enforcement process has been opaque, slow and wholly unsatisfactory. Delta's CEO, Christopher DeLise, stated, "The Enforcement Court's progress has been quite disappointing as we are given only general updates rather than specific details of the actions being taken by the court to satisfy Swifthold's judgment. This is unacceptable as great effort was taken, and resources expended, to have the judgment recognized by the Qatari Trial Court. Once this occurred, we expected the defendants' assets to be seized within a few months. Now it is eight months later and assets that have been identified still have not been seized in satisfaction of the judgment and when we press the court for detailed updates and explanations, we are given vague general statements. When we began the recognition and enforcement action in early-2019, we were assured by the Qatari Attorney General, Ali Bin Fetais Al-Marri, that the Qatari courts would respect international law and thereby enable Swifthold to timely obtain justice for the harm caused by the defendants. He assured us that if we did not obtain such results then we should call upon him for assistance. As such, we have now begun the process of asking him for assistance and potentially seeking assistance from other governments so that justice can finally be served." A spokesperson for Swifthold commented, "We were hopeful that the recognition of the judgment in Qatar would be the last major issue for us to overcome, but the speed at which the Qatari Enforcement Court operates is now causing us to wait needlessly and further delay justice.  This is incredibly unfair given how long and how hard we have had to fight to receive compensation for the harm caused us." In July 2019, Swifthold hired the international law firm Akin Gump to advise on the enforcement efforts in the Qatari Courts. The Akin Gump representation is led by Ms. Ileana Ros-Lehtinen, Senior Advisor, Member of Congress (Ret) and former Chairwoman of the House Foreign Affairs Committee. Ros-Lehtinen stated, "I recently called upon Qatar in The Jerusalem Post to mend its ways, not just mouth the words, when it comes to halting its extremist financing. In this case, Sheikh Fahad has previously violated U.N. sanctions when he imported dual-use laser devices to Iraq in 2003, he also co-owns a Qatari entity with convicted money launder Antonio Castelli, who helped pocket Swifthold's assets, and he is believed to have channeled these assets and others to parties supporting extremist groups." Delta's CEO closed by commenting, "After engaging several world-class investigative and asset tracing firms to identify assets of the defendants, we have become aware of other acts perpetrated by Sheikh Fahad and certain other persons within and outside Qatar that would be of interest to the governments of Qatari, the U.S., the U.K. and perhaps others. Indeed, it appears that Sheikh Fahad is living two lives: one where he ostensibly operates as a legitimate businessman, and another where he engages in unlawful activities with nefarious parties in the Middle East and elsewhere." For additional information, please visit http://sheikh-fahad-judgment.com/.