James Booth of Financial News
Wednesday July 27, 2022 10:26 am
Litigation funder Therium has tapped up elite law firms for four new investment managers as it prepares to raise its largest-ever fund, the firm’s chief investment officer said.
The fund has added associates Chris Wilkins from Slaughter and May and Charlie Temperley from Michelmores to its London office, and Corey Banks from Wachtell, Lipton, Rosen & Katz and Joshua Card from Sidley Austin in New York.
The hires come as Therium looks towards a fundraising that chief investment officer Neil Purslow anticipates will be larger than its £325m raise in November 2019.
“This is all about preparing ourselves for going out to market for fundraising,” Purslow told Financial News of the fund’s recent hires.
Litigation funders provide money to parties fighting legal cases in exchange for a slice of any damages they receive. They typically raise their money from institutional investors such as hedge funds and sovereign wealth funds.
Therium scored a success in 2019 by backing a successful group claim against the Post Office on behalf of sub-postmasters wrongly accused of fraud following a computer system error.
The funder also benefited this year from Volkswagen’s settlement of “Dieselgate” claims in the UK. The car maker payed out £193m to a group of more than 91,000 drivers.
Therium is currently backing a claim from the heirs of the Sultanate of Sulu against Malaysia in a $15bn legal battle over compensation they say they are owed for their ancestors’ former land in the oil-rich state of Sabah.
Therium’s planned fundraising comes as the litigation finance industry faces the challenge of the end of the cheap money and low interest rate era it enjoyed during years of explosive growth following the global financial crisis.
UK litigation funders had assets of £2.2bn last year, growing more than tenfold in a decade from 2011, when they had £198m in assets, according to research from law firm RPC.
Purslow said that litigation funds could still be attractive for investors looking for returns, despite rising interest rates.
“Equity markets haven’t performed very well and bond markets haven’t worked well for people, and we are seeing a higher inflation environment coming through, so I think non-correlated assets probably look quite attractive at this point,” he said.
However, Purslow said the cost of litigation finance could rise in a market where there was less money around.
“I suspect pricing in funding will go up because of the lack of liquidity in the space,” he said.
Therium was founded in 2009. It has raised more than $1.1.bn in total funds and backed claims valued at $100bn, according to its website.
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