PT  - JOURNAL ARTICLE
AU  - Thomas Healey
AU  - Michael B. McDonald
AU  - Thea S. Haley
TI  - Litigation Finance Investing: Alternative Investment Returns in the Presence of Information Asymmetry
AID  - 10.3905/jai.2022.1.155
DP  - 2022 Mar 31
TA  - The Journal of Alternative Investments
PG  - 110--122
VI  - 24
IP  - 4
4099  - https://pm-research.com/content/24/4/110.short
4100  - https://pm-research.com/content/24/4/110.full
AB  - Litigation finance is a rapidly growing niche asset class focused on debt and equity investments in litigation claims and law firms. We find that in-sample returns in the space have been in excess of 20% annually, with limited correlation to other investment areas. This apparent excess return may be due to information asymmetry and barriers to entry in the space. Our findings highlight the opportunities and risks for investors in this nascent asset class, and suggest the excess returns are due in part to limits to the speed with which efficient markets take hold.