The Search For Double Digit Consistent and Predictable Returns Irrespective Of Market Conditions
The uncertainty of the global investment landscape makes it challenging to find the right opportunities to protect your capital while economies struggle for confidence.
Savvy investors know that they must look for assets that will remain resilient against economic uncertainty and potential chaos in this climate, which is why KNG has dedicated its research team to create and manage an inventory of alternative investments with predictable double digit returns and hence grants access entry to professional investors to an exciting and low-correlation asset class, namely litigation finance.
LITIGATION FINANCE AS AN ASSET CLASS
A Totally Uncorrelated Asset Class
Litigation finance has evolved from being a niche strategy, to becoming a building block of an asset class that provides capital to monetise legal proceedings. Having quadrupled in size in the last 12 years the growing popularity of these financial assets, now commonly referred to as legal assets, has been attributed to the hunt for high yield in a low interest-rate environment.
KNG argues that legal assets present some fundamental attributes that make them an attractive complement to traditional investments in any market environment.
The first of these investment attributes is the uncorrelated nature of cash flows. The main trigger of returns in legal assets is a legal decision, such as a court judgment. The drivers and timing of legal determinations are unrelated to wider stock market returns, interest rates, inflation, market sentiment, or other financial indicators driving returns across traditional asset classes. The determinants of legal asset returns are mostly case-specific and related to a precise set of facts: applicable law, admissibility, liability, causality, and so on.
💡To some extent, the legal assets industry stands to benefit from the consequences of crisis in the economy.
For example, providers of legal capital have reported increased demand for legal financing as corporations seek to protect their working capital, and the increase in insolvencies is expected to create legal financing needs for at least the next five years.
There is a fundamental reason why legal asset strategies such as litigation finance can offer a strong return to investors, namely, that the expected return on a litigation finance transaction is unrelated to the invested amount.
In other words, the amount of capital needed to develop a legal asset is not ultimately related to the asset’s future value. The amount of legal spending necessary to get to a judgment or settlement is not necessarily proportional to the value of a dispute but mainly to the complexity of the legal work.
WHY INVEST IN LITIGATION FINANCE?
Double Digit Returns & Diversification
💡 One of the most significant advantages and incentives to invest in litigation finance is that it’s a non-correlated, alternative asset class producing strong double digit and absolute returns.
This means that the performance of legal assets is completely unrelated to any sharp movements in traditional capital markets or the state of the wider economy.
💡As an alternative investment, litigation finance has already been proven to outperform other unregulated assets, even while still relatively nascent. This largely reflects the sizeable returns available due to a funding bias to cases where there is a legal precedent. In terms of risk profile, litigation finance is attractive to investors, with high returns available from minimal risk that we further mitigate with our approach to funding and the law firms we provide funding to.
💡Litigation finance is also an Environmental, Social and Governance (ESG) investment with a profound social impact.
Ultimately, it is about opening up access to justice to those who don’t have the deep pockets needed to fund a legal action themselves, often because they’ve been ripped off in the first place, thus providing access to law for many potential claimants.
Through the funding provided by our highly screened litigation funders, we make it possible for more people to litigate in the knowledge that they won’t face crippling bills or even potential insolvency.
💡Learn how to enter this unique asset class that is urncorreled to any other and diversify your current portfolio mitigating risk whilst adding a fixed double digit income to that allocation of your wealth.