Tangerine Investment Management Ltd., a lender to medium-sized U.K. law firms, plans to increase its funds sixfold to 450 million pounds ($708 million) as it expands abroad and starts financing individual cases.
The global market for litigation financing, where investors such as BlackRobe Capital Partners LLC of the U.S. and London-listed Burford Capital Ltd. help fund legal fees in exchange for a share in any award, has grown to about $5 billion, said Clive Ward, chief executive officer of Tangerine International Ltd., which promotes the fund. Tangerine’s legal financing business, which lends working capital to law firms, is unique to the fund, he said.
“In most countries now, access to justice is no longer funded by the government,” Ward said in an interview yesterday during a private banking conference in Singapore, where Tangerine is setting up an office. “So if you can’t afford to run your lawsuit yourself, you can’t do it. We’re providing the mechanism to do it.”
Tangerine, which now has funds of 70 million pounds, delivered dollar-denominated returns of 6.75 percent in 2010 and 11.18 percent last year for investors including insurers Prudential Plc, Assicurazioni Generali SpA and Aviva Plc, according to fund documents shown by Ward. Tangerine, founded by Tim Schools, a U.K. lawyer, plans to raise the new funds by the end of 2013.
Lending to law firms is not a priority for banks, which may charge 20 percent or more in the U.K. for firms that don’t post collateral, compared with Tangerine’s flat 15 percent rate, Ward said.