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Lawsuit Funder Marks $500 Million for New Patent Dispute Bets

Sept. 27, 2022, 10:00 AM

Erso Capital, a litigation finance firm that launched 18 months ago, says it has $500 million to invest in patent disputes in the UK and the US, adding to the bounty of capital looking to bet on lawsuits.

Erso was founded with ties to litigation insurance firm TheJudge Group, and UK specialty insurer Thomas Miller Group. The funder, which has US and UK offices, said at the time it had $1 billion to invest in litigation.

Now, Erso Capital is looking to develop more patent litigation business, a growing target for funders.

“The decision to create an additional capital pool specifically for patent litigation was borne out of the demand we have seen, especially across both tech and life sciences sectors,” Erso cofounder James Blick said in a statement. “We’re fortunate to have institutional investors that share our appetite and vision to significantly ramp up our investment exposure in the space, in the US, Europe and internationally.”

The company says it’s backed by large, institutional investors. The $500 million pot for patent disputes is split between “discretionary funds, single managed accounts and co-investment funds,” according to Erso.

Litigation funders in the US manage $12.4 billion, a figure that’s up 10% from 2020, industry consulting group Westfleet Advisors found in a March survey. US funders spent $2.8 billion last year, an 11% jump from a year earlier.

A surge in IP litigation funding drove the increase, with patent disputes accounting for 29% of new commitments last year. The new cash included a handful of “portfolio” deals that give major law firms access to a pool of money to back multiple lawsuits.

Erso was founded by industry veterans Blick, Matthew Amey and James Delaney. Blick is based in California, Amey is based in London and Delaney splits time between the UK and New York.

The company has so far invested in business disputes, IP litigation, breach of trust cases, antitrust claims, and commercial and international investment treaty arbitration, it said in the statement. Its capital commitments generally range between $1 million and $25 million when investing in single cases.

To contact the reporter on this story: Roy Strom in Chicago at rstrom@bloomberglaw.com

To contact the editors responsible for this story: Chris Opfer at copfer@bloomberglaw.com; John Hughes at jhughes@bloombergindustry.com