European Legal Finance Fund

Annualized return3

Term3

48 months

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Status

Closed

Recently funded

Accepting $35,000 - $500,000 investments

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Accepting $35,000 - $500,000 investments

Overview

Invest in a Fund that will provide exposure to a diversified mix of European legal finance transactions originated and managed by Bench Walk Advisors. Selected law firms and plaintiffs will use the capital raised by the Fund to finance approved lawsuits and law firm needs.

The underlying transactions in the Fund will consist primarily of Western European collective actions, or cases with a large number of injured plaintiffs, or claimants, suing one or more defendants. The Fund will predominantly target two types of litigation in Europe: opt-out group collective action lawsuits and competition claims where a group of defendants are being sued for anti-competitive behavior. The Fund expects to work with top rated law firms who specialize in the types of cases included in the Fund.

Engaging in lawsuits is a capital intensive process that often requires millions of dollars of investment to pay for expert witnesses, consultants, research, and law firm overheads. As a result, many plaintiffs do not have access to the funds required to pursue their claims. To reduce the upfront cost burden to plaintiffs, certain law firms have engaged in contingency fee arrangements, whereby plaintiffs and other parties seeking damages elect to share case settlement proceeds with the law firms in exchange for eliminating upfront legal fees. This arrangement benefits both plaintiffs who, but for the contingency-based model, might otherwise be unable to seek damages, as well as law firms, who are able to fund cases on behalf of their clients in exchange for a participation in the settlement proceeds.

The Fund intends to seek investments that will enable it to provide target net annualized returns of 11% - 13% to investors over the life of the Fund. Given the supportive market backdrop, any returns above the investor preferred return will be split between investors (80%) and Yieldstreet (20%) (see the Cash Flow section for more details). Returns and cash flows to the Fund will be event-based and will coincide with the conclusion of each underlying legal case. The Fund has an initial term of 48 months with the option of two 12-month extensions.

Important Notes

• Please note, that the underlying investments in this Fund are also all featured in Legal Finance Fund III.

Highlights

Follow on competition claim liability
Potential returns
Diversified offering
Accessibility
Experienced partners
Experienced originator
Experienced Manager
  • Follow on competition claims benefit from regulatory bodies having already determined that the defendants have infringed under competition law. The general establishment of liability results in the lawsuit, and subsequently the investment, focusing on damages and the passthrough defense. Defendants may argue plaintiffs were able to pass the expenses through to their customers, offsetting the damages they themselves suffered.

  • Class, or group collective, action lawsuits allow claimants to “team up” against large corporate defendants and obtain financing collectively. Group collective actions allow for bringing a lawsuit against the defendants on behalf of injured parties collectively, which can result in a material increase in damages. In addition to the possibility of better funder economics, the risk of facing higher damages increases the pressure on defendants to settle.

  • The Fund expects to offer exposure across a variety of legal finance investment types in Western Europe. Increased diversity should help reduce individual case or borrower risk relative to investing in a single lawsuit or law firm loan.

  • The Fund allows investors to invest in legal finance deals at a lower initial investment amount compared to investing in multiple individual legal finance offerings through Yieldstreet. Eligible investors must verify they are “qualified clients”.

  • Funded cases are being brought by leading law firms that specialize in the respective type of litigation. Follow on competition claims are being led by one of the top ranked competition law firms globally.

  • Since being founded in 2017, BWA has funded over 150 cases with commitments fast approaching $400 million. BWA is co-headquartered in the US and the UK with the majority of the employees based in London. The Originator has generated net returns in the double digits on realized investments.

  • Through November 30, 2021, Yieldstreet has committed over $410M across approximately 75 legal finance transactions, 64 of which have matured and repaid investors.

Essentials

Please refer to the Private Placement Memorandum for more details about this offering.

Originator

Who is Bench Walk Advisors?

Bench Walk Advisors provides a wide range of financing solutions, including single case funding, investment treaty disputes, law firm portfolios, and class actions. They are co-headquartered in London and New York. Since being founded in 2017, the Originator has funded over 150 cases and committed approximately $400 million to cases across the world. Bench Walk was founded by Stuart Grant and co-managed by Adrian Chopin. Mr. Grant previously founded Grant & Eisenhofer, a plaintiff's advocacy firm with some of the largest securities class action recoveries in US history. Mr. Chopin was previously a senior investment banker at Deutsche Bank.

Cash flow

How do I get paid?

The lawsuits underlying the Fund’s investments are not tied to a formal payment schedule, therefore, investors can expect to receive distributions as the underlying cases settle. The Fund intends to seek investments that will enable it to provide target net annualized returns of 11% - 13% to investors over the life of the Fund.

As cash flows are received by the Fund from its investments, unpaid fund expenses, reserve amounts, Yieldstreet’s management fees and annual member expenses are deducted first, and then capital contributions are returned to investors. Next, the remaining proceeds are paid to investors up to an 8% annualized return (Investor Preferred Return) on invested capital (which accrues on an annualized basis). Additional remaining proceeds are paid to Yieldstreet (YS Catch Up) until it has received an amount equal to 20% of the sum of the Investor Preferred Return and the YS Catch Up, and then all remaining proceeds (Profit Sharing) are split between investors (80%) and Yieldstreet (20%). Please also refer to the Private Placement Memorandum and accompanying chart for additional details regarding the Fund’s prioritization of distributable proceeds.

Investments

What type of investments will the Fund make?

The Fund’s mandate allows it to make debt and equity-like investments in a range of contracts, securities and instruments, the underlying values of which are derived from, or materially impacted by, the outcomes of litigations. The investments that the Fund makes can be structured in a variety of ways, such as loans to law firms, participations in litigation funding agreements, the purchase of future proceeds from case settlements and direct and indirect investments in debt and equity securities of plaintiffs. The underlying cases are expected to include antitrust, bankruptcy, securities fraud, contract violation, business torts, false claims, appraisal actions, international arbitration, and qui tam (whistleblower). Yieldstreet intends to raise additional funds periodically as new investment opportunities are identified.

Each underlying lawsuit is evaluated to determine the expected potential settlement amount. However, there is the possibility that the underlying lawsuits will not be successful or will be settled for less than their expected value. To help mitigate risk, the Fund aims to offer a diversified portfolio of cases across law firms, type of case, geography, and case stage, with the Fund’s commitment in the underlying lawsuits typically under $5M.

To further mitigate risk, the Fund may structure its investments with additional forms of credit protection, such as borrowing bases, recourse to the law firm, personal guarantees from litigators, and insurance policies.

Slide 1 of 3
  • Returns & fees

    Management fee

    2%

    Target net return

    11-13%

    Share of excess profits

    80%

    Incentive fee

    20%

  • Schedule

    Payment schedule

    Event based

    Term

    Date

    Initial term

    48 months

    Possible extensions

    Two, 1-year

  • Structure

    Tax document

    K-1

    Offering structure

    SPV

    Expenses

    Ann'l flat expense

    0.25%

Docs

Content

This offering page describes only certain aspects of the offering ("Offering") of the securities issued by YS BWA LF IV LLC ("Fund"). The Offering is made only by means of the Private Placement Memorandum dated November 5, 2021 relating to the Offering (the "PPM"). The information on this offering page is a summary of the Offering, does not purport to be complete and should not be considered a part of the PPM, or as incorporated in the PPM by reference or as forming the basis of the Offering. No person has been authorized to give any information or to make any representations other than those contained in the PPM or in any marketing or sales literature issued by the Fund or Yieldstreet Management, LLC, as adviser thereto, and referred to in the PPM, and, if given or made, such information or representations must not be relied upon. All investors must read the PPM in its entirety prior to investing in the securities.