Fortress Funding Group is looking for to lift about $1 billion for its newest fund in litigation finance, a sector by which it’s changing into a powerhouse, in accordance with folks accustomed to the matter.
The brand new fund, dubbed Fortress Authorized Belongings Fund II, can be greater than double the scale of the prior model that closed in 2021, the folks mentioned. A consultant for Fortress declined to remark.
Litigation finance entails offering funding to legislation corporations and corporations in authorized battles to get a share of the payouts. As soon as on the fringes of other investing, backing lawsuits has change into a multi-billion-dollar business.
Fortress will look to take a position the brand new capital in authorized property, litigation finance offers and regulatory-driven conditions, mentioned the folks, asking to not be named as the main points are non-public. The automobile would goal about 16% web returns, one of many folks mentioned, noting that may be according to the agency’s monitor report.
The New York-based investor is already a pacesetter within the sector, with $6.8 billion in commitments. It has backed legislation corporations behind a few of historical past’s greatest mass tort fits, such because the Roundup circumstances in opposition to Bayer AG and talcum powder litigation in opposition to Johnson & Johnson. And as an investor in patents, Fortress pursues alleged infringers in court docket, taking up tech giants like Apple Inc.
Associated: Fortress Has Plowed $6 Billion Into Other Companies’ Lawsuits
Its newest fund elevating comes as credit score traders are looking for to diversify their methods, shifting to asset-based finance and different esoteric markets and away from conventional company direct lending. That’s as a result of a rally in credit score has made property costly.
Earlier this month, Jack Neumark and Joseph Dunn, who lead the agency’s authorized property division, reached out to traders on the newest stage of the fund elevating, the folks mentioned.
Fortress has been constantly originating over $600 million in new authorized asset transactions every year, Neumark mentioned in a Fortress released interview in Could. Such offers may very well be structured as debt, asset purchases, most popular fairness or fairness stakes, in accordance with its website.
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