Litigation financing has emerged as one of the hottest investment trends, but until now, it hasmet with red flags and bumps in the road. Essentially, it is a dynamic asset class that attracts interest as a way to diversify portfolios,
offering return profiles that are positively skewed and not correlated with traditional investments. Litigation has always been slow, but case durations have stretched longer since COVID, making financing more necessary for many law firms and plaintiffs.
Along with the prominent expansion of the industry, liquidity limitations have presented notable hurdles, bringing about risks like duration for litigation financiers. However, JurisTrade tackles these concerns by creating an equitable, transparent, and fluid marketplace, integrating data-informed pricing across the litigation process. With its simple tagline, “Democratizing Access to Litigation Finance,” Koutoulas and his well-heeled team specialize in connecting law firms, claim owners, and investors, streamlining the complex world of litigation finance.
“With JurisTrade, you can trade interests in various litigation asset categories,” Koutoulas explained. “For many investors right now, it is hard to get into the space because it’s in an opaque market dominated by a few big firms. So, our goal is to democratize and bring more capital into the space, making it easier and cheaper for law firms (to get involved). Additionally, having access to a liquid secondary market will be a boon to the biggest existing players in litigation financing. JurisTrade will allow them to focus on origination and early stage cases where the highest risks and returns are, then allow more patient or risk averse investors to come in once cases pass key milestones.”
Koutalas pointed out that massive backlogs still clog the legal system in a post-COVID world, with cases pending and awarded finances still held in escrow, making it challenging for attorneys nationwide to finance new – and significant – cases. Cue Juristrade, a platform that is already making a dent in reforming the industry through its offering of primary and secondary market liquidity and settlement pricing.
“Top law firms do a great job of screening for only the best cases. Investors can potentially generate outsized returns by helping them finance cases allowing firms to hedge their duration risk,” attorney James Koutoulas,
JurisTrade’s CEO and Board Member and also the CEO and founder of Typhon Capital Management, told Impact Wealth Magazine, emphasizing that their revolutionary new marketplace gives users freedom to navigate and make choices as they see fit and gives Qualified Purchasers beyond litigation finance funds a chance to be a part of the action.
Here’s how it works.
“For example, there is a lot of inventory for victims of state sponsors of terrorism such as Iran and other countries. So, there is a fund set up for that at 25 percent. (Investors) can go on JurisTrade and buy a share in one of those cases and depending on what happened and on its members and disabilities, people are going to assign a value,” Koutoulas said.
“These are cases where someone could potentially make a couple of hundred percent on that investment in a lifetime.” Monies in class-action lawsuits such as these are typically paid out through seizures in money laundering and related cases, and payouts are then distributed pro-rata based on the severity of each injury. From this standpoint, an investor stands not only to make money but also contribute to the greater good of aiding victims to see some semblance of the justice they deserve.
The revolutionary technology-powered platform allows investors to comb through the details of each claim in whatever case is of interest and make their decisions accordingly.
“You can log on to JurisTrade and see different amounts and the different details of each claim and sift through and find what size is right for them,” Koutoulas asserted. “They can then either buy in at the offering price or put
in a bid and go back and forth (to seal a deal).” For this highly sought-after lawyer and CEO, who is the President and Co-Founder of the Commodity Customer Coalition (CCC) and has represented more than 10,000 customers pro bono and aided in bringing in over $6.7B in customer assets in the MF Global bankruptcy, this latest venture is another means of enhancing the economic efficiency of litigation finance along with serving the interests of justice for law firms, their clients, and investors.
JurisTrade has already introduced stakes in numerous notable legal cases via closed-end funds offered by its affiliate, Typhon Capital Management. Additionally, talks with investors are progressing to create tailored thematic collections. Live trading is expected to begin in the first quarter. In addition to Koutoulas, JurisTrade is led by a top-notch team. Founding investors and management includes Kevin J.P O’Hara as Executive Chairman and Larry Hite, the creator of systematic trading and a litigation financer for 18 years, as Chief Strategy Officer and Vice-Chairman.
And when it comes to getting into – or expanding – one’s portfolio, there is no time like the present. “The economy has stayed more resilient in the face of high interest rates than I thought,” Koutoulas conjectured, highlighting that interest rates are coming down though the housing market remains slow since so many borrowers locked in low fixed rates pre-2022. “We are still cautious of the economy, but most homeowners won’t sell unless they have to.”
Moreover, Koutoulas’s Typhon Capital runs the award-winning Leonidas Cryptocurrency Fund while is law firm is also one of the nation’s litigation frontrunners in the crypto arena. He’s anticipating significant changes to that industry as the year unfolds, especially if a different administration is voted in come November. As it stands, the cryptocurrency world in the U.S. remains hamstrung by what Koutoulas refers to as “unconstitutional” treatment by the powers- to-be. When I asked why Big Government fears the burgeoning cryptography-secured digital currency, he offered a succinct response without a moment’s hesitation: “Crypto is a check on their power.”
Investors can sign up to view initial inventory and be kept up to date at www.juristrade.com
