Private equity’s newest asset class:
real estate litigation

Investors see opportunity for outsized returns

TRD New York /
Feb.February 27, 2019 08:00 AM

One of the latest focuses for the private equity market is real estate litigation. (Credit: iStock)

Life insurance settlements and litigation finance are gaining steam in the private equity market, and some investors are focusing on financing real estate lawsuits.

Peter Martenson, head of global distribution at Eaton Partners, discussed the practice at length in an interview with PitchBook. He said one of the advantages of focusing on litigation finance is that investors can choose the type of portfolio that they want to build.

“Some investors focus on pharma cases; some focus on real estate; some focus on tax cases,” he said. “The specialists can build portfolios that cater to LPs’ levels of risk tolerance.”

Martenson compared litigation financing to venture investing, given that they both do not always result in a return of capital. However, if the investor does not want a high loss ratio, they can also get involved during the later stages of a lawsuit when returns are more likely, yet lower.

“So we’re seeing a couple types of risk/reward approaches,” he said, “one that mimics the VC model and one that looks more like synthetic credit investments.” [PitchBook]Eddie Small


Related Articles

arrow_forward_ios
(Photos by Sylvia Varnham O'Regan, Getty)

After looting, BIDs reverse guidance on boarding up stores

After looting, BIDs reverse guidance on boarding up stores
“5 years ago, people would say, what’s a TikTok?” Bill Rudin on why NYC’s office market may be more resilient than you think

“5 years ago, people would say, what’s a TikTok?” Bill Rudin on why NYC’s office market may be more resilient than you think

“5 years ago, people would say, what’s a TikTok?” Bill Rudin on why NYC’s office market may be more resilient than you think
Clockwise from bottom left: Robert Reffkin of Compass, John Gomes, Scott Rechler of RXR Realty, Rich Barton of Zillow, Gary Keller of Keller Williams and Don Peebles of The Peebles Corporation (Getty)

“America is in crisis:” Real estate leaders address George Floyd protests

“America is in crisis:” Real estate leaders address George Floyd protests
A mass timber project in Cleveland is now under construction and could be the nation’s tallest when completed. Harbor Bay Real Estate Advisors’ Intro development will rise nine stories with 298 residential units (Credit: Harbor Bay Real Estate Advisors)

Mass timber project in Cleveland could be nation’s tallest

Mass timber project in Cleveland could be nation’s tallest
Joy Construction’s Eli Weiss (left), Maddd Equities’ Jorge Madruga (top), and Drew Katz with 20 Bruckner Boulevard in the Bronx (Getty; Google Maps)

“Dream” comes true for long-vacant Bronx ice house

“Dream” comes true for long-vacant Bronx ice house
“We’re not in the business of land-grabbing:” Hana CEO on the future of flex space

“We’re not in the business of land-grabbing:” Hana CEO on the future of flex space

“We’re not in the business of land-grabbing:” Hana CEO on the future of flex space
Photo illustration of Sen. Brian Kavanagh (Credit: Kavanagh by Albin Lohr-Jones/Pacific Press/LightRocket, Getty Images, iStock)

Lawmakers skip #CancelRent in favor of more modest bills

Lawmakers skip #CancelRent in favor of more modest bills
The process for challenging property assessments is so antiquated, officials won’t do Zoom meetings. (iStock)

“A recipe for disaster”: Fighting property taxes in a pandemic

“A recipe for disaster”: Fighting property taxes in a pandemic
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...