Calunius Raising PE Fund for Litigation
Third-party litigation funding shop will now be able to invest in cases.
December 31, 2009
Calunius Capital is raising a fund earmarked for investments in commercial lawsuits claiming at least £500,000 ($794,000) in damages. The fund is structured as a private-equity vehicle; Calunius expects to hold its first close in February.
The London-based firm is a participant in the third-party litigation funding sector, where investors pay attorney and expert fees for claimants in exchange for a percentage of awarded damages or a multiple of supplied capital. Calunius, established in 2007 by former Dresdner Kleinwort investment banker Mark Wells and ex-Dresdner banker and Freshfields Bruckhaus Deringer attorney Mick Smith, matches claimants with investors and structures settlements, but will now be able to take on the added role of investor.
A publicly-traded entity offered to assist Calunius with an initial public offering, but the firm declined because it wished to avoid the disclosure requirements that accompany IPOs. Another third-party litigation funding vehicle, Burford Capital, recently raised £80 million in an IPO on the LSE's Alternative Investment Market exchange. Burford's IPO is the second largest out of London for 2009.
Calunius, which is regulated by the UK's Financial Services Authority, will invest in large-scale lawsuits in the UK as well as the U.S., Europe, Australia and offshore jurisdictions. Third-party litigation funding is an established asset class in Australia and the U.K., and is starting to take off on this side of the Atlantic (see related story). Investment banks such as Credit Suisse, insurance companies like Allianz and hedge funds have been investing in the asset class.
Allianz's head of UK litigation funding, Christian Stuerwald, will become head of case assessment at Calunius on Jan. 1. He has approved more than 150 litigation funding transactions during his career. Leslie Perrin, who served as senior partner, managing partner and head of litigation at law firm Osborne Clarke, became chairman of Calunius in January 2009.
Calunius worked as a broker for Addleshaw Goddard when the British law firm brought a £50 million lawsuit against another London-based law firm, Collyer Bristow, John Bailey (former head of Collyer's commercial law practice) and Danish businessman Bjorn Stiedl on behalf of 555 claimants in December 2008. The case involved investors who lost money in allegedly fraudulent technology investment ventures. According to The Lawyer, The Judge also served as a broker, while Allianz supplied £5 million in litigation funding.
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