Private Equity And Litigation Finance


About a month ago, I discussed the venture capital landscape, and why litigation funders are attractive partners for VCs and VC-backed companies in need of resources to adequately defend their businesses. A similar, but distinct, phenomenon exists in private equity.

Private equity firms (which invest in a broader class of companies and employ a wider array of value generating techniques than venture capital) share some common characteristics that make litigation finance a useful product within the industry.

  • Disciplined Budget: Private equity firms (or “PE firms”) typically implement disciplined budget allocations to meet operational targets and service debt payments. For example, a PE firm might invest in a middle-market company selling a specialized product within a specific region, and attempt to grow the value of the company by using excess cash flows to grow sales in broader market channels. Or a private equity firm might invest in various companies within a fragmented industry with the aim of consolidating the companies into a single entity and thereby reduce redundant costs…

Private Equity And Litigation Finance

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