Litigation funding: A profitable portfolio alternative during Brexit?

Napoleon famously said that "England is a Nation of Shopkeepers". Under duress, he would perhaps have admitted "and of Magna Carta". Britain’s common law legal system, very different from the Napoleonic Code, is arguably the best in the world, explaining why so many international commercial agreements are executed here. 

In the current Brexit-dominated environment, the UK should play to its strengths and continue to grow and export its legal system, currently worth c.£36bn annually to the national economy.

AxiaFunder is a litigation funding platform offering high net worth and sophisticated retail investors access to commercial litigation investments that typically would only be available to large private equity institutions such as Harbour or Therium.

Global data show that (unsurprisingly) economic prosperity correlates very closely with good rule of law, according to data from the most recent World Justice Project (2019). Venezuela, for example, scores at the worst end on both metrics and at the other extreme Scandinavia is close to the top, with China being a (potentially temporary) anomaly. Commercial litigation funding, helping to protect property rights, has a significant positive social impact and almost invariably has a tangible net benefit to the claimant in question when they most need financial support.

With yields at close to multi-century lows, equities valuations stretched, and Brexit dominating the headlines, attractive alternatives to cash are arguably limited. In this context, the double-digit returns offered by litigation funding, with no correlation to macro or political risk are potentially attractive to qualified investors.

To read the full article, visit https://www.altfi.com/article/5885_litigation-funding-a-profitable-portfolio-alternative-during-brexit.

Originally published in Altfi.com on 28 October 2019.