Commercial litigation finance platform LexShares Inc. has closed the firm's first multiclaim fund, which was capped at $25 million, the company said Thursday.
LexShares, a commercial litigation finance platform, announced the successful singular closing of LexShares Marketplace Fund I, LLC and LexShares Marketplace Fund I QP, LLC (collectively “LMFI” or “the Fund”) for the Fund’s maximum amount of $25 million.
"The year 2017 was undoubtedly a landmark year for litigation finance.... It is against this backdrop of growth that we focus on five important litigation finance trends to watch for in 2018."
"LexShares, a three-year-old funder that invests primarily in small to midsize commercial cases, recently announced it is raising $25 million for its first fund focused on portfolio investments. The firm, which uses an online platform to pair cases with investors, said it has invested $16.3 million in 40 cases so far."
"A start-up litigation finance firm is expanding its offerings, the latest sign of a shifting market for outside investment in lawsuits."
“LMFI will bolster LexShares’ ability to help plaintiffs with strong cases obtain redress against much better funded adversaries, allowing claims to be adjudicated based on their merits rather than financial resources,” LexShares co-founder and Chief Investment Officer Max Volsky said."
"One of the biggest pieces of feedback that we get from investors is that [cases] fill up so quickly that it's hard for investors to invest in them," Greenberg said. The new fund will allow greater participation—including from individual, accredited investors—and help spread risk, he added."
"As part of its announcement, LexShares has released internal performance metrics for the firm. And there are some pretty eye-popping numbers here. For starters, LexShares claims a median IRR net of fess and expenses of 66%."
"LexShares discloses performance to date and launches the LexShares Marketplace Fund I (LMFI) providing investors access to multiple legal claim investments through a single fund."
"Launched in late 2014, LexShares identifies investment-worthy cases through a combination of personal connections, AI-aided filtering, and independent vetting, and then posts them on its platform for investors to browse and fund themselves."
"Until now, this kind of investment has been available only to the very wealthy, who invested primarily through hedge funds. LexShares has made it possible for people who are not ultra wealthy to invest in lawsuits through a model similar to real estate crowdfunding. For people who don’t know what litigation funding is, Greenberg explains on this episode of the Capital Gains Podcast."
"Over the next few years, we will see the litigation finance market continue to grow and mature. This growth will be driven by client demand, fueled by increasing awareness on behalf of all litigation finance stakeholders, plaintiffs, attorneys, and investors."
"Our team's been investing in legal claims since the late 90s, we have a tried and true underwriting process to vet these claims," said Jay Greenberg, CEO and co-founder of LexShares.com"
"LexShares targets commercial cases that seek about $100,000 to $1 million in funding"
"Once reserved for hedge funds and other deep-pocketed investors, litigation funding is moving into the mainstream through startups like LexShares in Boston..."
"LexShares releases details of funding raised for a plaintiff in a qui tam whistleblower case against Stericycle, which resulted in a $28.5 million settlement and 93% annualized return for LexShares investors."
"Investors in litigation finance like the lack of correlation to other markets... Litigations exist in an economic vacuum, and changes in interest rates, currency values, and housing prices don’t seem to have an effect on court proceedings. Also, investors like the natural exit and liquidity – the average case lasts around 28 months, giving the investment a short-term life cycle."
"New York-based LexShares, launched in late 2014, allows SEC-accredited investors...to invest as little as $2,500 in individual commercial lawsuits by clicking on cases."
"Prior to LexShares, investments in litigation were primarily reserved for institutions and ultra high net worth individuals. Now with crowdfunding, individual investors are able to invest in the same asset class which these institutions have been taking advantage of for years."
"Litigation finance is an investor’s dream...While hedge funds have been backing litigation for years...LexShares is the first electronic marketplace for matching investors with cases, however, and could provide a test of broader interest in litigation as a source of returns."
"Online marketplace for investing in lawsuits welcomes financial institutions"
"We live in a litigious society, and based on the crowded courts, you could say that lawsuits are a shared societal investment. Hedge funds and pension funds know that...Now the hedgies have some courtroom competition."
"Business litigation...is an expensive proposition...But for the victor, the payouts can reach millions, or even billions, of dollars. So it’s no surprise that financiers from Wall Street found a way to get involved."
"The litigation funding marketplace is developing fast with innovative companies such as LexShares..."
"Litigation finance, where third parties help finance lawsuits, is just starting to make inroads in the United States, but its business model is already being disrupted."
"Another entrepreneur shaking up the legal business is Jay Greenberg, who quit an investment-banking career at Deutsche Bank to start LexShares, an online marketplace where high net-worth investors can finance commercial litigation."
Podcast: "Known as ‘litigation finance’, this form of investing hasn’t been available to a wide investor base but returns have been as high as 50%. Jay talks to Zack Miller, Tradestreaming’s host, about the origin of litigation finance and how investors can now use LexShares to get access to a very exciting asset class."
"There may be money to be made in the courtroom, and not just by the parties facing off."
"For several years, Bloomberg Businessweek has tracked the rise of “litigation finance,” a niche market where hedge funds invest in lawsuits. Today litigation finance moved in a new direction with the launch of LexShares..."
"A new website unveiled Wednesday uses crowdfunding to finance potentially high-value commercial lawsuits."
Nightly television news: "A new crowdfunding website aims to help raise money for legal cases."
"How does it work? Companies in the middle of a lawsuit will have the chance to post their case on the service's website. Once the case is deemed meritorious, accredited investors can decide if they want to invest."
"New online marketplace LexShares is launching to enable people to invest in commercial lawsuits and get a portion of the proceeds of cases that are won."
"Private equity financing of lawsuits in certain corporate cases has existed for several years, although the idea of funding a legal campaign for a return on investment is still in its infancy. The founders of LexShares are looking to change that."
"'The market really looked to me like private equity in the early 1980s.' Greenberg’s solution is LexShares, a company that officially launched today to run an online marketplace for investing in lawsuits."
"A new crowdfunding platform aimed at financing lawsuits is banking on the notion that mainstream investors will want to cash in on the growth of third-party litigation funding."
"Accredited investors around the world can use the site to browse lawsuits that require funding, and then put a minimum stake of $2,500 into any that appeal to them."
"That’s the idea behind LexShares, an online marketplace Greenberg and his business partner Max Volsky unveiled on Wednesday. The website lets investors buy a stake in the outcome of a lawsuit by giving businesses the cash they need to operate while their cases go forward."
"LexShares seeks to fund plaintiffs in commercial lawsuits for a share of the potential settlement; the legal startup’s staff of six vets suits before posting them, and only government-accredited investors can buy “stock” in a lawsuit."
"LexShares, a crowdfunding platform that enables individuals to invest in litigation, launched its service today. The platform connects accredited investors with plaintiffs in commercial lawsuits in order to make an equity investment in a specific case."
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