LexShares Opens New $100M Litigation Fund to Investors
The litigation backer, which launched six years ago as a platform for individual investors to pick and choose between cases, also released new data on its investments so far.
June 10, 2020 at 12:29 PM
3 minute read
Litigation funder LexShares announced a new $100 million fund Wednesday, two years after closing its first fund allowing investments in a portfolio of lawsuits at $25 million.
The move marks a continued turn towards a model resembling other funders of commercial litigation for a company that, when it launched in 2014, focused on smaller, a la carte investments. While institutional investors and accredited individuals can still use the LexShares platform to identify and select individual cases to invest in, investors in the new fund will see returns based on the performance of all cases on the platform.
The launch of "LexShares Marketplace Fund II" follows the outfit's 100th investment in a legal claim in its six years of operation.
LexShares co-founder and CEO Jay Greenberg trumpets the fact that his business releases more details on the nature of its investments than other privately held rivals. The two largest players in the industry, Burford Capital and IMF Bentham, do make numbers available on the performance of their portfolios, but are obligated to do so as publicly traded businesses.
"I would love to see more transparency in our industry, because I think transparency leads to credibility, and I think that leads to a larger and more efficient market," Greenberg said.
According to LexShares, out of 103 total claims the firm has invested in as of Wednesday, 43 have resolved, resulting in a 52% median internal rate of return, after fees and expenses are factored in. Additionally, the firm's average investment per case is rising, with a figure of $1.46 million over the last year, compared to $845,000 the previous year. In another example of the firm's growth, investments since the start of 2019 represent 48% of all capital deployed since its 2014 founding.
The funder relies on its proprietary Diamond Mine software to identify potential claims. The program scrapes all federal courts and most state courts, leading to over 1 million potential investments identified since the launch of the software in 2016. Nearly half of actual investments have been in state court, with a slight majority in federal court.
In addition to bringing in investments via the two funds, LexShares allows institutional and accredited investors to fund individual claims directly, via its online marketplace, where typical investments range from $500,000 to $2 million. When the company launched in 2014, leaders said that accredited investors would be able to contribute as little as $2,500 to individual cases.
—Additional reporting by Ben Hancock
|Read More
Why Litigation Finance Transformed in the 2010s, And What 2030 Might Bring
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllTrump's SEC Overhaul: What It Means for Big Law Capital Markets, Crypto Work
Former Perkins Coie Partner Moves to Stradley Ronon in Chicago
Status Driven With Unpredictable Fees: What Private Equity Clients Really Think About Their Lawyers
7 minute readRising Varied Investment Products, Regulatory Activity Drive Demand in Investment Funds
Trending Stories
- 1Justices Will Weigh Constitutionality of Law Allowing Terror Victims to Sue PLO
- 2Nevada Supreme Court to Decide Fate of Groundbreaking Contingency Cap Ballot Measure
- 3OpenAI Tells Court It Will Seek to Consolidate Copyright Suits Under MDL
- 44th Circuit Allows State Felon Voting Ban Challenge to Go Forward
- 5Class Actions Claim Progressive Undervalues Totaled Cars
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250