AxiaFunder has provided an update on its Housing Disrepair (HDR) portfolio, a month on from launch,
The UK-based litigation funding platform said that after less than three months from closing, three per cent of the portfolio had been settled, while a further 18 per cent was in settlement discussions.
The product was launched to enable investors to diversify their funds across up to 90 cases, while targeting returns of up to 28 per cent.
AxiaFunder initially raised £600,000 for the portfolio funding product. It was the first time the platform took partial assignment of a law firm’s revenue, as opposed to entering into a contract directly with the claimants.
The portfolio is currently valued at £300,000.
Its underlying assets are housing disrepair claims. At the time of launch, it said 80 per cent of investors’ principal was insured, with underlying claims having an expected average duration of nine to 15 months, and only five per cent expected to progress to trial.
Capital and returns for the underlying cases are paid to investors as and when each case settles.
According to AxiaFunder, its partner law firm is “actively engaged” with 65 per cent of claims “at or past the surveyor expert report stage.”
It said that while it was still “early days”, the portfolio was on track to reach its targeted 25 per cent plus internal rate of return (IRR).
An audit report concluded: “Generally, the files are progressing well. There are strong expert reports being utilised on the files and the cases are generally of a good standard”.
The platform is able to monitor the details of each claim via direct access to the law firm’s system, with summary overview reports provided on a weekly basis.
It said three claims settled are likely to have sufficient proceeds to pay current contractual returns.
It has raised over £800,000 in the last three months for HDR claims.
Portfolio litigation investments are diversified and uncorrelated to broader markets. AxiaFunder said it expects to launch further investment opportunities of this type in the coming months.