Asset Correlation and Portfolio Risk
How litigation finance's uncorrelated return profile can improve risk-adjusted returns in institutional portfolios through genuine diversification.
How litigation finance's uncorrelated return profile can improve risk-adjusted returns in institutional portfolios through genuine diversification.
We calculate the purchase price of claims by quantifying variables such as litigation risk, counterparty risk, the risk-free interest rate, and the expectated time to recovery.
Portfolio construction in litigation finance requires rigorous probabilistic modelling. We explain how Monte Carlo simulation and low inter-case correlation combine to produce stable, predictable fund-level returns even when individual case outcomes are binary.
India has no blanket prohibition on third-party litigation funding. We trace the legal history from the champerty doctrine through the Supreme Court's landmark Bar Council v AK Balaji ruling and the Tomorrow Sales Agency decision to the current SEBI AIF framework.
India has made significant strides in recent years to position itself as a leading arbitration jurisdiction.
Legal finance offers a mechanism to unlock billions of dollars of capital trapped in disputes and convert it into immediate growth capital.
Jurisdictions seeking to position themselves as arbitration-friendly hubs are increasingly recognising litigation finance as part of the dispute resolution ecosystem.