Trending Now
  • Consumer Legal Funding Is Not Third-Party Litigation Financing, ARC Argues
Commercial Deals

CIO Roundtable: Art of the Deal from Terms to Returns

September 28, 2022

CIO Roundtable: Art of the Deal from Terms to Returns

A panel consisting of Sarah Johnson, Senior VP and Co-Head of Litigation Finance at D.E. Shaw, Aaron Katz, Co-Founder and CIO of Parabellum Capital, David Kerstein, Managing Director and Senior Investment Officer at Validity Finance, and Joe Siprut, CEO and CIO of Kerberos Capital Management, discussed the various investment aspects of litigation funding as an asset class. The panel was moderated by Steven Molo, Founding Partner of MoloLamken. The conversation began with new trends in the industry. Price compression came up early. Joe Siprut of Kerberos Capital Management noted he has witnessed price comparison over the past couple of years, including having seen multiple term sheets that were mis-priced. Litigation finance has always been about attractive risk-adjusted opportunities, yet if the risk remains the same and price compression remains, that reduces the attraction of the asset class. Moderator Steven Molo was surprised there hasn’t been more fallout in this regard. Aaron Katz of Parabellum pointed out how things are opening up after COVID, and that helps a lot, given that a pipeline of cases awaiting trial quickly burns through ROI. Katz countered the price compression argument, stating that he hasn’t witnessed real price compression and hasn’t found his firm to be competing on raw price. Of course this depends on which segment of the market you are looking at. The conversation then steered toward ESG, and David Kerstein of Validity noted how there are green shoots of funders getting involved in impact litigation. Yet for most commercial funders, ESG would maintain the same type of analysis as any other case–that said, funders like to have a ‘good story’ for the case, and ESG can bring that to the table. Aaron Katz mentioned Parabellum is very cautious about ESG in particular. “We think people need to be careful about labelling things incorrectly,” said Katz. There are real impact players out there, and litigation funders should be careful about loosely claiming the mantle. The next question was pretty blunt: Is there a secondary market right now? Aaron Katz thinks not “I pray for it daily.” There is a network of well-resourced institutional players who like to look at claims, but the transactions are laborious (DD challenges, information asymmetry). The secondary participant is not going to be in a direct conversation with the counter-party, and that could cause complications. One final point: Joe Siprut noted that the evolution of a secondary market is one of the main things that can really unlock a lot of investment for the industry. One of the main barriers to investment is the long lockup period investors are staring at, and if a secondary market were to materialize, that would make fundraising a much easier sell.

Commercial

View All
Commercial

Counsel Financial Report Details $464 Million in Committed Capital Across 14 Transactions

Counsel Financial has published its Summer 2026 Litigation Finance Bi-Annual Report, documenting 14 transactions representing approximately $464 million in committed capital and more than $2 billion in underwritten case collateral over the reporting period.

According to Newswire, the report covers transactions the firm originated, underwrote, serviced, or monitored across mass torts, class actions, single-event personal injury, complex litigation, and specialty litigation portfolios. Capital came from eight alternative asset managers, three commercial banks, and additional specialty finance participants.

Mass torts accounted for 46% of collateral composition and class actions 30%, while alternative asset managers supplied 74% of capital provider participation. Featured transactions include a $110 million multi-participant delayed draw facility funded by a specialty finance firm alongside an alternative asset manager, and a $35 million commercial bank revolving facility.

The report frames the period as one in which two distinct pools of capital operated side by side in contingent-fee litigation. "Bank capital and fund capital are both active in this space right now, and they come in with different mandates, different diligence requirements, and different reporting expectations," said Nicholas D'Aquilla, President of Counsel Financial. "What this period showed us is that both need the same underlying capability. Someone must underwrite the collateral, monitor it, and report on it to an institutional standard. That is the role we play across the market, regardless of who is funding the transaction."

Counsel Financial has deployed more than $2 billion over 25 years of lending to plaintiffs' firms. The bi-annual disclosure offers an uncommon window into how institutional capital is being structured around contingent-fee portfolios, and into the underwriting and reporting infrastructure that banks and funds alike now expect from the asset class.

Commercial

Legal AI Startup Aavalynx Raises £1.5M to Cut the Cost of Corporate Disputes

Aavalynx, a legal AI platform for analyzing litigation portfolios and dispute economics, has raised £1.5 million in pre-seed funding to help companies cut legal spend and make earlier, data-driven decisions about their disputes.

As reported by Tech.eu, the round was led by European firm Omega Ventures, with participation from West Coast-based Two Ravens and angel investors including senior law firm partners and a former head of Amazon Europe. Founded in 2023 and commercially live since 2024, the company counts Vodafone among its co-development partners.

The platform functions as a central repository that structures and interrogates dispute data at scale, giving organizations the visibility to intervene earlier and shift from reactive to proactive litigation management. Founder and CEO Hanna Roos — who spent nearly two decades in disputes at Freshfields, Latham & Watkins, and Quinn Emanuel — said early results show roughly 30x return on investment in saved damages and legal fees, rising to 200x when rescued commercial opportunities are included. "Good tools make disputes efficient, but great ones make them disappear," she said.

For the litigation finance community, tools that quantify and de-risk dispute portfolios sit close to home. As funders and corporates increasingly treat litigation as an asset class, data-driven portfolio analysis of the kind Aavalynx offers could sharpen how claims are valued, selected, and managed.

Commercial

Ignite Specialty Risk Enters Australian Market with Sydney Hire

Ignite Specialty Risk, the London-headquartered litigation insurance specialist, has entered the Australian market, opening Sydney-based operations to address a gap in local litigation-insurance capacity long dominated by a single provider.

As reported by Insurance Business, the move is anchored by the appointment of Lucinda Stormont-Sainsbury as head of Australian operations. She brings 15 years across underwriting, claims, private practice, and insurance law, having previously served as senior legal counsel at HDI Global SE and been named Insurance Lawyer of the Year 2026 at the Australian Corporate Counsel Awards.

The Sydney office will offer after-the-event (ATE) insurance, litigation risk insurance, and contingent risk insurance — products increasingly used by funders, law firms, and corporates to transfer the financial consequences of adverse legal outcomes. "Australia is a sophisticated insurance market with an increasingly complex risk landscape," Stormont-Sainsbury said, pointing to demand for specialist solutions.

Ignite has written more than US$2 billion in litigation capital across international markets since launching in 2022, including US$360 million in U.S. policies in 2024 covering litigation assets valued at over US$5 billion. Chief underwriting officer David Green cited the firm's "long-term commitment to the market."

The expansion adds a second major player to Australia's litigation-insurance sector and reflects the broader convergence of insurance and litigation finance, as risk-transfer tools become central to how funded claims are structured and de-risked.