The litigation funding arm of City law firm Rosenblatt has made its move into insolvency work with a pledge to undercut existing pricing structures and explicitly take on market leader Manolete Partners.
LionFish Litigation Finance has called its funding product ISELRO, named after a Spanish bull famed for killing celebrated bullfighter Manolete in 1947.
LionFish is a subsidiary of AIM-listed RBG Holdings, Rosenblatt’s holding company, and was launched on 1 May.
RBG used its float to raise money to finance its own litigation, but then created LionFish to offer funding to other law firms.
Since launch, LionFish has originated and reviewed over 60 funding opportunities, of which four have so far been approved.
LionFish managing director Tets Ishikawa said: “The calls from insolvency practitioners and solicitors for cheaper, faster and more flexible financing solutions have been getting louder and louder for a while.”
While the market for financing and assignments of insolvency claims has become well established over the past decade, “with only one major player monopolising the market, fatigue has set in at the lack of evolution in price, process or speed. The market has been craving fresh competition”.
Research Manolete commissioned earlier this year suggested it had a 67% share of the insolvency litigation funding market.
Mr Ishikawa said pricing depended on the risk profile of each case, “but we will undercut market levels seen in most cases, which seems to be on average around 50%+ share of the recoveries for the funder.
“We can also be more flexible in terms of how we structure funding. Instead of a high percentage share of the recoveries, we can price risk on interest rate-based principles linked to the time and amount of capital committed, which changes the pricing profile considerably and makes cases which otherwise would not have been viable.”
Manolete mainly buys assignments of claims rather than funding the insolvency practitioner, and LionFish will also offer both options.
The new competition comes at a time also when Manolete is under pressure from an anonymous report that questioned its business model. The company issued a lengthy rebuttal last week but saw its share price suffer as a result.