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What a Fund Manager Should Know About Entering the Litigation Finance Industry
Best of the Best USA Expert Guide 2019
June 2019
The term “litigation finance” (also known as “litigation funding”), refers to several forms of funding transactions, some of which do not involve the actual funding of a specific litigation. For an industry that, until recently, was little known in the legal and finance markets, litigation finance has grown sharply — not only due to broader acceptance but also because of the high potential returns and the uncorrelated nature of the investment. While private funds in 2018 were able to marginally outperform the S&P for the first time in a decade, the returns for the industry have been generally inconsistent and lackluster for many private funds. Managers are seeking more unique asset classes. Litigation finance offers the prospect of higher returns than traditional investment strategies and of being uncorrelated to equity market movements, both of which are particularly alluring during periods of market downturn and volatility. In this article, partners Stephanie Breslow and Boris Ziser and associate Yasmin Naghash discuss why litigants seek financing, types of litigation finance, assets funded and the structure of a litigation finance vehicle.
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Effective Tuesday, May 28, 2024, the US will transition from a “T+2” settlement cycle to a “T+1” settlement cycle.[1] This change will impact all transactions in subject securities[2] effected through an SEC-registered broker-dealer absent an express agreement to the contrary.[3] The US Securities and Exchange Commission (“SEC”), in adopting the rule changes implementing the T+1 settlement cycle,[4] separately adopted an amendment to Rule 204-2 (“Books and Records Rule” or “Rule”) under the Investment Advisers Act of 1940, as amended, that also go into effect on May 28. For most registered investment advisers (“RIAs”) to private funds, the amended Books and Records Rule should not require significant changes to current operations.
Alerts
Managers that offer ESG-focused funds to European investors should take note of the final “Guidelines on Funds’ Names Using ESG or Sustainability-related Terms” (“Guidelines”) published by the European Securities and Markets Authority (“ESMA”) on 14 May 2024.[1] The Guidelines will affect funds established in the EU and, depending on the approach of the local EU member state regulators, are also likely to affect non-EU funds marketed in accordance with the EU national private placement regimes (“NPPRs”) established under the Alternative Investment Fund Managers Directive.
Alerts
Effective Tuesday, May 28, 2024, the US will transition from a “T+2” settlement cycle to a “T+1” settlement cycle.[1] This change will impact all transactions in subject securities[2] effected through an SEC-registered broker-dealer absent an express agreement to the contrary.[3] The US Securities and Exchange Commission (“SEC”), in adopting the rule changes implementing the T+1 settlement cycle,[4] separately adopted an amendment to Rule 204-2 (“Books and Records Rule” or “Rule”) under the Investment Advisers Act of 1940, as amended, that also go into effect on May 28. For most registered investment advisers (“RIAs”) to private funds, the amended Books and Records Rule should not require significant changes to current operations.
Alerts
Managers that offer ESG-focused funds to European investors should take note of the final “Guidelines on Funds’ Names Using ESG or Sustainability-related Terms” (“Guidelines”) published by the European Securities and Markets Authority (“ESMA”) on 14 May 2024.[1] The Guidelines will affect funds established in the EU and, depending on the approach of the local EU member state regulators, are also likely to affect non-EU funds marketed in accordance with the EU national private placement regimes (“NPPRs”) established under the Alternative Investment Fund Managers Directive.