Fortress Investment Group, which manages $48 billion in assets, is known for its work in private equity, credit, and real estate. In 2007, it became the first alternative-investment manager to go public. It was acquired by Softbank Group Corp. in 2017 for $3.3 billion and was later sold to Fortress management and Abu Dhabi’s Mubadala Investment Co. in 2020.
While Fortress is known for acquiring and reselling distressed companies, it has also been steadily building its litigation finance business, which has 32 employees making investment decisions. Its intellectual property arm has a separate team of 19 employees.
The company’s law lending business primarily focuses on mass tort firms, which have become increasingly popular among litigation funders. Fortress has gone from investing $5 million to $10 million in single commercial cases to providing loans exceeding $100 million to law firms for their entire caseloads. This approach has helped the company build a diversified portfolio that hedges risk.
Fortress has provided loans to several law firms over the past decade, including Johnson Law Group, Napoli Shkolnik, Smith Law Firm, OnderLaw, Weitz & Luxenberg, and Crump Law. The filings don’t specify the amount of the loans or how the money is used, but Fortress closely monitors how its money is used.
David Perla, Burford Capital’s vice chair, said Fortress is the name that frequently comes up when mass tort law firms discuss financing their portfolios. “They’re aggressive, they’re smart, they understand the space,” he said.
Fortress’ approach to litigation finance differs from that of Burford Capital, which mainly invests directly in commercial litigation and issues non-recourse commercial funding while focusing on valuing litigation risk. Fortress, on the other hand, takes a credit-like approach.
Overall, Fortress’ success in litigation finance can be attributed to its strong track record in the industry, its powerful regulatory and enforcement capabilities, and its ability to pursue infringers aggressively.
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