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Group Litigation Claim (Case ID: 3879)

Commercial Fraud
100% OF MIN FUNDED

Partnership funding of £170,000 required to seed fund a group claim by approximately 3,000 investors in a foreign exchange group trading strategy, against two regulated brokers and the manager of the trading strategy. All three defendants have allegedly participated in negligence and or fraud against the claimants by knowingly concealing losses. While the claim is still at a preliminary stage, it is supported by a substantial amount of documentary evidence from a whistle-blower. The approximate claim value is estimated to be £20m, subject to verification. The Partnership gets paid its principal and a fixed return before the Solicitor, Counsel or Claimants are paid. The Partnership potentially also receives an additional share of the proceeds. The two brokers are regulated and required to maintain indemnity insurance and minimum capital levels and are both part of larger established trading groups. However, at this stage there is still some uncertainty regarding their ability to pay the full estimated claim value due to limited public disclosure requirements in Cayman and BVI. The Partnership Offer will provide seed funding to cover the initial stage of the action, during which the Norwich Pharmacal disclosure application will be pursued. If no settlement is reached, further capital and ATE insurance will need to be sourced before issuing the claim. This is a Higher-Risk Category, offer for seed funding, with a potential Multiple on Capital (MoC) of 4.8x to 7.4x depending on the final settlement value, irrespective of when the claim is resolved.

Amount Raised: £170,000

Date Funded: 21/12/2022


50 investors

SLP

Funded

Benefits to investors


  • High Returns

    Limited availability of capital to date means investors have enjoyed attractive returns with IRRs as high as 30-35% 

  • Zero Correlation

    Litigation returns are uncorrelated with other risk assets such as equities and bonds or even the broader economy
  • Natural Exit

    The legal process normally creates a well defined duration for each investment - usually between 12-24 months, in contrast to the much longer term of typical private equity deals

Risk control: Only cases with strong merits will be put forward to investors


  • Strong case review team: with a mix of professionals from both financial services and commercial litigation including lawyers named as ‘Leading Individuals’ in Legal 500 and Chambers & Partners

  • Rigorous case review process:  combining both internal and external expertise to provide a highly objective assessment of each case thus minimising potential risks

  • Strict case selection criteria: detailed assessment of cases based on key factors such as their merits, economics, experience of counsel and enforceability

  • Extensive network within the legal sector:  providing access to the broadest universe of cases with the most attractive investment opportunities

AxiaFunder's data evaluation for case assessment is powered by Solomonic litigation analytics 

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