Connection Capital, a specialist syndicator of investment funds from private investors, has raised £8m for litigation funder Therium.
This largest ever fundraise from Connection Capital, and its third commitment to Therium, will bring the total invested by the firm in litigation funding to £16m.
Therium has previously committed to major cases such as the class actions against Volkswagen over the emissions scandal, a £300m competition damages claim against MasterCard and Visa on behalf of a group of 27 high street retailers, and a shareholder action against Lloyds Bank over the ill-fated Hbos takeover during the 2008 financial crisis.
“Commercial litigation funding is fast gaining traction as a highly attractive component of a diversified investment portfolio,” said Claire Madden, partner at Connection Capital.
“Institutional investors are seeing the value of the asset class but it can be very difficult for private investors to get in on the act, so we are delighted to have been able to offer them yet another opportunity to do so.”
Litigation funders provide claimants with the finances to meet the cost of commercial litigation or arbitration, in return for an agreed share of the proceeds of any successful claim.
“Investors are drawn by the potential to generate attractive returns while providing a hedge against exposure to more mainstream investment classes such as stock or bond markets or developments in the wider economy,” said Madden.
Most of Therium's money comes from institutional clients, but the litigation funder has maintained relationships with a few private investor vehicles – such as Connection Capital – which supported it from its beginnings in 2009.
Without these historic relationships, it would be near impossible for private investors to gain direct exposure to the high-stake asset class of litigation funding.
Connection Capital also runs its own private equity vehicles, invests in commercial property and provides structured debt to small British businesses.