Single Case Return Simulator

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This simulator shows the Expected Value for investors in a hypothetical SPV which takes partial assignment of a commercial claim. The Expected Value is the probability-weighted sum of the pay-outs in different scenarios. The simulator shows the Expected Value based on assumptions selected below.

There are three main scenarios: 1) the case wins with a pre-agreed contractual pay-out to the SPV and therefore to the SPV investors (the contractual pay-out is specified in the investment offer document), 2) the case loses and there is no adverse cost liability for investors 3) the  case loses and there IS an adverse cost liability for investors (we consider this scenario to be highly remote).

The simulator allows investors to attribute probabilities to the main WIN and LOSE scenarios and to see the impact on the Expected Value. The footnotes at the bottom of the page show a worked numerical example. The Blog section of the website provides context. 

Please get in touch if you have any questions at [email protected].

This simulator is not intended to correspond to any particular case available for investment on our platform. This tool is being provided for illustrative purposes only, investors should read the full offer materials on any specific case to understand its details before deciding to invest.

Assumptions

1. 100% of investor funds deployed on Day 1 investments
   
   
2. Required case return calculated on a simple interest basis
   
   
3. 'Investor return per annum if case wins' is net of AxiaFunder's performance fee and net of corporation tax. The AxiaFunder’s fee is normally 20% but may vary on a case-by-case basis and investors should read the offer document for more information on the fees charged in relation to any given offer
   
   
4. Investor returns calculated PRE-capital gains tax or other taxes payable by the investor
   
   
5. Adverse cost is the potential liability of third-party funders for opponent’s costs if the Claimant’s case fails and the Claimant lacks the financial resources to pay these adverse costs. For more information on risks involved in litigation funding please read our recent blog post
   
   
6. After the Event Insurance provides an indemnity to the claimants for their liability to pay their opponents’ costs if the claim is unsuccessful. It can be used in any type of litigation and by either a Claimant or Defendant; although in practice ATE Insurance is mainly used by Claimants
   
   
7. 1% probability of insurance not paying out as expected and adverse cost risk equal to the amount invested
   
   
8. MoC: Multiple on Capital; MoC = Expected Investment Value / Investment Amount Committed
   
   
9. IRR: Internal Rate of Return; IRR = [MoC ^ (12 / Months to Resolution)] - 1
   
   
10. Worked numerical Example:
    
    P(Lose) = 100% - P(Win) = 100% - 75.0% = 25.0%
    
    P(Lose & Liable for Costs) = P(Lose) * P(Investors Liable for Costs If Case Loses) = (100% – 75%) * 1% = 0.25%
    
    P(Lose & Not Liable for Costs) = P(Lose) * (100% – P(Investors Liable for Costs If Case Loses)) = 25% * 99% = 24.75%
    
    Expected Value = P(Win) * Win Payout + P(Lose & Not Liable for Costs) * Lose & Not Liable for Costs Payout + P(Lose & Liable for Costs) * Lose & Liable for Costs Payout = 75% * 24,000 + 24.75% * 0 + 0.25% * (-10,000) = 18,000 + 0 – 25 = 17,975

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