Legal finance is a practice where a third party provides capital to a plaintiff or law firm involved in litigation in return for a portion of any settlement from the lawsuit. Returns are largely uncorrelated from stocks and bonds as they are based on legal outcomes, not public markets.
Learn more about legal financeThis Fund offers a hybrid structure with a junior and senior position. Two-thirds of the return is in the form of a fixed coupon; the remainder is equity with upside potential.
Even if 30% of the cases result in a loss, investors are still expected to achieve the target return.
67% Senior
The majority of investor returns are in the form of a fixed coupon secured by potential future settlement proceeds.
33% Junior
The remaining portion of investor returns are structured as equity, allowing investors to receive potential excess proceeds should cases settle for higher than expected.
The Fund currently includes 36 cases with the intention to grow to 40 by the end of 2024. Cases are diversified across jurisdiction, case type, and law firm.
The Fund is sponsored by Bench Walk Advisors (BWA), a top litigation funder with $870M+ committed to 250+ cases.¹⁰
The Founder and Managing Director of BWA has invested $10M of his own capital that is subordinated to the Fund’s senior notes. Only once the senior debt has been repaid with interest will the equity be entitled to the remaining proceeds.
Yieldstreet has committed $58M across six BWA legal finance investments since 2019. One of their offerings has fully matured, realizing a net annualized return of ~20%.
This innovative legal finance structure provides the best of both worlds — primarily fixed-rate senior returns with the potential for significant upside. Combined with the strong diversification across 35-40 cases and the Sponsor’s personal commitment, we believe this Fund is an optimal way to generate largely uncorrelated returns.
10. Source: BWA, as of October 2023.
Fund intended for qualified purchasers only.
11. Target term represents a projected term for the investment and not actual term. Unless otherwise specified, target term is based on an analysis performed by Yieldstreet of the expected timeline of litigation settlement outcomes. The Term represents the expected time it will take for an investor to receive their principal investment back. There is no guarantee that the Term will be achieved and the stated maturity of the Fund is 10 years. Actual term may deviate from these expectations materially, including due to market or economic factors, portfolio management decisions, modeling error, or other reasons.