Fund managers head for the courts to cash in on divorces
INVESTORS looking for the next big opportunity beyond the Brics have been offered a new place to put their money – Britain’s £100m a year divorce industry.
Novitas has launched a divorce litigation fund to create an alternative lending source for people who need help to pay for divorce costs.
It plans to raise £5m from investors and is offering them an annual return of eight per cent.
“The reduction in banking credit, coupled with the Government cut backs to legal aid, means that people seeking a divorce can face a hefty financial burden. We are aiming to provide an alternative lending source to help divorcing couples,” said Jason Reeve, fund founder and a qualified high net worth financial advisor.
The fund is targeting lending on individual cases typically of between £5,000 and £100,000, although it will lend up to £250,000, with an average loan lasting 12 months.
Novitas is not the first firm to invest in this way, however, as hedge funds have provided fundings in very high net worth divorce cases. Hedge funds have traditionally provided assistance in personal injury or commercial litigation cases.