I was approached by litigation funding platform AxiaFunder, offering their cooperation. I briefly checked them out and agreed to work with them, since I think readers of this blog will find value in different money investment option than P2P investing – litigation funding.
So here is AxiaFunder Review 2020! I want to be honest here and point out that this is not a paid review – you will be able to see this throughout the review. I will point at bad, as well as good points about the platform.
Structure of AxiaFunder Review 2020
The review is split into following sections:
- Introduction, where I explain why AxiaFunder can be an interesting investment opportunity,
- What is litigation funding, with pros and cons
- About AxiaFunder platform,
- My take on the platform, and
I am pretty sure anyone reading this blog is a financially literate person not interested in his/her money just sitting in the bank, doing nothing. Maybe you are part of the FIRE movement, or just don’t want to be in the so-called rat race, working till you die.
This means investing our money, not in Starbucks coffees, but in things that make you more money in return. We are all looking to maximize our returns. P2P lending – the main point of this blog – is a great way to earn passive income.
But as you know, we don’t want to put all our eggs in one basket but diversify our portfolio. We want to make it safer. One such option is litigation funding, and AxiaFunder is a litigation funding platform, that might be an interesting diversity option.
It certainly isn’t for everyone, so please form your own opinion, see what you like and what you don’t, and decide based on your thoughts and opinions.
What is Litigation Funding
For the sake of understanding it better, let’s define what litigation means:
Litigation: an action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.
To put it simply, it’s a process of people going to court and fighting over some issue. As you probably know, this costs money – legal processes, lawyers, etc. This is where AxiaFunder comes in.
This is how things go down:
- AxiaFunder identifies legal cases that are suitable for investment, meaning that have a high likelihood of winning.
- AxaFunder put a case on their platform, looking for investors to invest needed money for legal costs of the litigation (this, of course, is where name litigation funding comes from).
- If AxiaFunder wins the case, the opposite party of the litigation case has to pay them. Money is then distributed between AxiaFunder and the investors.
Growth of Litigation Funding
The litigation funding industry has grown rapidly in North America, Australia, England, and Wales, and around the world, in the past decade or so. Since 2013, the market has quadrupled in size. So we can be pretty sure, that litigation funding is here to stay, and it will keep growing.
Pros and Cons of Litigation Funding
Of course, everything in life has pros and cons. Keep in mind that for every person, not all pros are good, and not all cons are bad, so please decide for yourself what is important to you.
- Good for diversifying investors’ portfolio,
- High returns (overall 20 – 30% p. a.),
- Low correlation with P2P lending and current turbulent (or how I like to call it, Covid) financial markets,
- Higher chance of litigation funding platform to be legit and regulated,
- Not suitable for “dumb money”, which means more professionalism (remember FastInvest’s emails?).
- Potential illiquidity,
- Investors need to invest across at least several cases (10 being recommended by AxiaFunder),
- Of course, no buyback guarantee (there would be no point in funding if the platform had the money for buyback in the first place, right?). If the case is lost, investors receive nothing.
- Returns are not guaranteed.
Now that we learned what litigation funding is, its pros and cons, and how AxiaFunder plays a part in it, let’s investigate how legit is the platform in the first place. Is it good for investors?
The company was founded in 2016 by Cormac Leech (CEO), Rabin Tambyraja, and Sophie Liu, who are also the main shareholders of the company, together with Michael Lent. They all have multi-year (mostly 20+) experience with financial services, law, investments. Based on this, I am 99.9% sure they are capable for the job and being successful at it.
Legal Cases at AxiaFunder
The first legal case AxiaFunder funded was in January 2019. So far, 150 cases have been reviewed, 14 have been approved for funding, and 9 have been fully funded on the platform. Of these 9 cases, 2 have been won, which for investors generated 43% return over 8 months, and 94% return over 15 months. The other 7 cases are still ongoing.
They are strict at picking up legal cases. Since they are looking to win at least 65% of the cases, they approve only 1 case for every 10. They aim at funding 2 cases a month.
The minimum investment is 500 British pounds. The maximum investment varies by case.
How to Join AxiaFunder as an Investor
AxiaFunder accept investors from all countries in EEA, and most countries globally, excluding USA and Canada.
A potential investor has to register on the platform, pass the risk questionnaire (to understand the risks involved in litigation funding), and complete the KYC (Know-Your-Customer) process. Look here for the registration link.
My Take on the Platform
In my opinion, litigation funding is an appropriate investment opportunity for investors who are looking to diversify their investment portfolio. Since the relatively high entry barrier, it is obviously not for everyone. Still, the higher-than-usual returns are certainly tempting but don’t get fooled by it. Know your risks and reward of litigation funding.
AxiaFunder is professional, trusted and regulated platform for litigation funding.
Litigation funding is an interesting investment opportunity, mainly for diversifying and high returns, but which also carries its risks. As long as an investor knows what he is doing, I believe these waters can be navigated with success.
- Professional and regulated platform,
- An interesting option for diversifying a portfolio,
- High returns,
- Low correlation to markets, P2P lending, etc.
- Relatively high entry barrier,
- Returns are not guaranteed,
- Chance of losing money (to be honest, this is true for all platforms).
That’s it for my AxiaFunder Review 2020! Thank you for your time and I hope you were able to make your opinion regarding litigation funding and the AxiaFunder platform. If you are interested in trying it out, check here to get the registration link.