Therium Capital Management, the litigation funder behind Noel Edmonds against Lloyds Banking Group, yesterday announced the completion of £300m in new funding, thought to be led by US insurer Amtrust Financial.
The firm completed its first close at £200m, with another £100m expected from both its existing investor and new “global institutional investors”, it said yesterday. The fund will be deployed over the next two years.
Therium declined to reveal the identities of its investors, but it is thought Amtrust, a New York-based insurer with almost $24bn (£17bn) in assets, is the main backer.
Litigation funders back potentially highly lucrative cases where the claimants would otherwise not have the money to initiate legal action.
As well as the recently announced case brought by celebrity television presenter Edmonds, Therium is currently funding a £550m case against Lloyds brought by shareholders related to its acquisition of HBOS during the financial crisis, which will finish next month.
Meanwhile, it will also fund the almost £1bn action being brought against Barclays by financier Amanda Staveley over the fallout from a financial crisis fundraising involving Qatar. Other prominent targets include Google and Volkswagen.
Since April 2015, Therium has expanded its operations significantly, with teams launching in the USA, Spain, Norway and Germany.
John Byrne, Therium’s co-founder and chief executive, said he sees “very significant growth potential in litigation funding” around the globe.
His co-founder, Neil Purslow, said investor demand had “exceeded expectations”.
Proponents of the relatively new practice of litigation funding say it allows access to justice for people and firms who could otherwise not afford legal funding for particularly complex cases, while some investors welcome returns which are not correlated with most other asset classes.
However, critics point out the high proportion of court awards – often around a third – taken by the funders.
Amtrust Financial did not respond to a request for comment.