In the first article of this two-part series, I provided an overview of some of the issues related to duration in the litigation finance asset class. In this article, I discuss some of the ways in which investors can manage duration risk, both before they invest and after they have invested.

When you are speaking to an institutional investor about litigation, it doesn’t take long until the concept of “duration risk” enters the discussion. Everyone seems to have a story about that one piece of patent litigation or commercial dispute that went on for over a decade that seems to have marked them for life even though they weren’t in any way involved.

The interesting aspect of Indemnities is in trying to estimate the returns inherent in providing the protection.  Different than most traditional litigation finance which requires the funder to finance hard costs …