NY Times, Jan. 12, 2014
An upstart investment firm that bets on lawsuits has raised hundreds of millions of dollars for its second fund.
The firm, Gerchen Keller Capital, is expected to announce on Monday that it has amassed about $260 million for the fund, bringing its total investor commitments to $310 million. The fresh capital, coming less than a year after Gerchen Keller opened its doors, underscores investors’ confidence in an obscure corner of Wall Street that has gained adherents in recent years.
Litigation finance, as the business is known, often involves bankrolling plaintiffs in exchange for a slice of the lawsuit’s potential winnings. Some firms, including Gerchen Keller, can invest in defendants as well, by advancing legal fees and then collecting a return if the case is successful. If the case fails, the investors walk away with nothing.