AxiaFunder, Europe’s first for-profit litigation funding platform, has secured GBP1.9 milliion from investors since launching in January 2019, with a 100 per cent success rate on completed cases.
Co-founded by investment banker Cormac Leech and entrepreneur Sophie Liu, AxiaFunder has fully funded a total of 13 cases via its platform so far, winning all five that have been concluded with an average investor return of 55 per cent, and as high as 94 per cent.
The other eight cases remain ongoing including a software case in Barcelona, AxiaFunder’s first international case. Two further litigation investment opportunities have recently been added to the platform.
The current cases at the funding stage include a shareholder dispute case relating to a high-value house building business, and a group litigation claim against two retail banks the funding is in the process of closing.
Cormac Leech, the London-based company’s co-founder and CEO, says one of the key attractions of litigation funding as a new asset class was the degree to which it did not correlate with the broad economic environment.
He says: “Litigation is not largely impacted by variability in economic growth in the same way traditional assets such as equities and bonds are.
“Indeed, there is an argument that litigation funding provides investors with an attractive alternative in times of economic uncertainty.
“With equities at multi-year highs many investors may think it is a good time to diversify out of equities, and litigation funding is an option for some high net worth and sophisticated investors to consider.
“With the potential high return, investors also need to be aware of the risk of capital loss in litigation funding. Investors can find more information on our website’s risk warning section.”
A multi-stage vetting programme ensures that only those cases with a strong chance of success – approximately one in every 20 cases reviewed by the AxiaFunder team – actually make it on to the platform.
The risk of loss is mitigated by After the Event insurance (ATE insurance), which help to reduce any liabilities of a failed case.
It is compulsory for all cases funded on the platform to have ATE insurance where adverse cost risk exists, and solicitors are typically paid at least partially on a CFA (conditional fee agreement) contingent basis to ensure alignment of interests and to keep costs down.
