Woodville Litigation Funding investment review – that will be the topic of today’s article.
During this article I will speak about the positives and negatives associated with this investment and why, for most investors, superior risk-adjusted options exist.
This is particular important given the recent news that Woodville are delaying repaying investors.
If you have been proposed Woodville Litigation Funding and want a second opinion, you can email me (advice@adamfayed.com) or contattatemi qui.
Woodville do not focus on UK-resident investors, so this recensione should be considered by people living outside the UK only.
Introduzione - who are Woodville and what are the basics associated with this investment?
Woodviile are a UK-based company who specialize in litigation funding. The main focus is in consumer finance and personal injury.
The company makes a return of the proceeds if a successful claim is made by somebody who qualifies for one of the loans.
Woodville offer a one, two and three year bonds. The returns are 10%, 11% and 12% respectively.
The investment is available in Euros, USD and British Pounds.
The investment minimums are $10,000, with most investors doing much higher sums.
Where is the investment sold?
The investment is sold globally, but especially in expat hotspots such as the UAE, Saudi Arabia, Qatar and beyond.
Often it is part of a wider portfolio, sold on platforms such as Vita del custode.
How does Woodville manage the risk?
Woodville selects cases based on three criteria according to materials they have produced
- They enter at a late stage of the process when liability is established
- The lending to law firms is done after ATE insurance is put in place
- They are given assignment rights on each case.
With that being said, it has to be remembered that many other litigation funds have gone bankrupt. This doesn’t mean that the same thing will happen to Woodville.
It merely means that the above considerations don’t negate the fact that this is a high-risk, alternative asset, which should only be considered by certified high-net-worth individuals and sophisticated investors.
What are the positives associated with this investment?
- Whilst positives have historically existed, including no delayed payments until recently, right now it is better to wait until the existing issue is resolved before focusing on this.
Quali sono gli aspetti negativi?
I principali aspetti negativi sono:
- You are locked in for 1-3 years.
- If you don’t go for the insured option, you are taking a much bigger risk than through A-rated corporate and government bonds. Even with the insured option, the insurance doesn’t cover everything.
- With an investment of this kind, there is always a risk of completely losing your capital. It has happened on many occasions with similar investments
- There are also many new options available in the expat and high-net-worth market such as A-rated banks offering close to 9% on certain products that we have offered to clients. Given that Woodville’s return is only 2%-3% per year higher, you have to question if the extra risk is worth it. To understand more about those alternatives you can contattatemi qui.
- You are reliant on your investment advisor to construct a good, well-rounded portfolio, which meets your needs. This is the case with any investment though, and can be a positive or negative depending on who is representing you.
- Woodville is completely focused on the UK-market (meaning they are focused on lending to UK law firms not UK-based investors). This is good in some ways. It is a tried-and-tested market, and there isn’t the complexity of multi-jurisdictional lawsuits. It is also a stable market, because some people always take the litigation route. In fact, people are arguably more likely to seek litigation during troubling economic times. It does mean you are reliant on one economy though.
- Even if you want to take a bigger risk with alternative assets, there are other options available that pay higher returns for similar levels of risk. That includes some firms that have been in the loan note market for far longer than Woodville.
- Ultimately, private investments (private equity and private debt) are never as transparent as listed options available in the stock market. It is, therefore, almost impossible to fully assess the risk.
- After receiving private and confidential information in October 2023, my view become a little bit more negative about this investment.
- The FCAs recent decision on PCP might add some extra risks for models like this, but this isn’t yet fully known.
- What we do know is that Woodville have asked for a vote on delaying repaying one of their bonds until 2026. The delay is only for a few months, and investors will be compensated with higher returns. It also will only affect one of their bonds, and not the loan notes. It does show, however, the risks with their model. The delay was due to certain liquidity risks that could happen with the loan notes as well.
So, whilst considerable positives exist, the negatives outweigh them for most investors. This is especially the case now that fixed-income returns have gone up due to higher interest rates.
How does the insurance option work?
On investment amounts above a certain threshold, it is possible to add an insurance option, which we have done on many occasions.
If after two weeks of payment being due, Woodvile haven’t paid, the investor can first speak to Woodville.
If that doesn’t work, it is possible to speak to the insurer directly to make a claim, within 28 days.
However, it is a mistake to think that insured options are risk-free. There have been other insured options that have collapsed. Like all insurance, the terms and conditions don’t cover everything.
What are the challenging going forward for firms like this?
The more difficult economic conditions in 2023 and possibly 2024 could present opportunities and threats for firms like Woodville.
It could be argued that more difficult economic times will result in more people taking litigation action against others.
What is more, Woodville aren’t reliant on getting money from the banks, so higher interest rates shouldn’t affect the model.
With that being said, more difficult economic times always presents threats to any business model.
Conclusione
There are always risks with investments like this.
Given the massive risks but also opportunities in alternative assets, it is important to seek a second opinion, especially if you are not a financial expert.
If you are looking for a second opinion you can contact me directly.
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Adam è un autore riconosciuto a livello internazionale in materia finanziaria con oltre 830 milioni di visualizzazioni di risposte su Quora, un libro molto venduto su Amazon e un contributo su Forbes.
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On the article below, taken directly from my Quora.com answers, I speak about the FTX scandal and collapse, alongside numerous other topics.
Please advice if these investments are genuine and if there is no risk if anyone invest between 10k to 50k and what is the status on coupons and if anyone wants to sell this investments
I will email you
Dear sir, l have just read your article n Woodville Litigation Funding and not with interest you comment in concluding that to secure the insurance cover then the investment needs to be on or over $100000 or currency equivalent… This is an important comment as on contacting an agent for Woodville was told its 100000 in either usd/Euro/GBP .. this seems odd to me so can you please confirm it is the equivalent in whatever currency.
Kind Regards
John Hipkiss
I just emailed you John.
Hi Adam, I was considering investing $100,000 in Woodville or are there still any A-rated banks offering close to 9%? Any advice? Best regards, Jonathan
Hi Jonathan. I will email you.
Dear Adam,
I am considering investing 25’000Euros in the Woodville Litigation Funding, for 1 year, do you have any updates on the value for money of this investment since you first placed this YouTube blog earlier this year? How long has this funding been going for?
Thanks in advance,
Drew
Hi Drew. I just emailed you.
I’m considering investing 30k USD for 1 year. Do you think it still worth it?
I will get back to you soon via email.
I am also considering investing 24K USD for 1 year. Is it worth the risk?
Hi Jason. I will email you asap.
Hello Adam, I was reading the article and was planning to invest 25 K …. all business have their risks but Why mentioned that next year will be more risky than this one?
Hi Eduardo . I just emailed you. I didn’t say 2024 was riskier than 2023.
I am looking to invest USD 30,000. But I am worried about which option I should consider – 1 year or 2 years?
I just emailed you now. 2 years = higher returns but arguably higher risk.
Dear Adam,
You’re saying it’s a mistake to think that the insured option is risk-free. Could you kindly explain why? What are the risks?
HOLA ADAM, TE PREGUNTO CUALES SON LOS RIESGOS AL CAPITAL A PESAR DE OPTAR POR UNA OPCION DE INVERSION ASEGURADA ( SEGURO ATE) CON WOODVILLE?
Hello Adam,
Thank you for your review of Woodville. I am about to invest 27,000 USD for 1 year but looking for info to help me with my final decision.
I’m not clear about your 2023 vs 2024 comment. Can you help me understand better?
I’m also curious about the other safer products with almost similar returns that you seemed to mention.
Grazie
sure i will email you.
I am looking to invest 100’000 pounds into woodville to get the insurance option why do you think it will still be risky given it’s a 3rd party insurance linked with Loyd’s bank ? Also which A rated banks are offering 9% I have another 60,000 pounds to invest. Please advise.
Hi Shah. I just emailed you. Insurance isn’t full proof. Many other insured investments have failed.
Ciao Adam,
was seriously looking at investing 50k in the Woodville investment with Chase Belgrave. Having read your very interesting review I think it is too hight risk. I am a pensioner and could really do with an additional income stream. Any suggestions would be appreciated.
Thanks Debbie. I emailed you.
As mentioned, better alternatives always depend on how much risk you want to take.
Ciao Adam
I am investing in Woodville but I am also keen to know what other options with similar returns you mention in your article.
Ciao Adam,
I would like more info on the other options you mentioned.
Can you please e mail me so that I can enquire with you further? Thanks.
Sure.
Ciao,
Also interested to know which other products offer fixed income similar to Woodville’s 10-13% thar you mention.
Grazie
hola Adam, cuales son los riesgos al capital de una inversion con seguro ATE en Woodville?
Ciao Adam,
I am now a resident in Portugal, due to BREXIT!
I have 100,000€ to invest and £20,000 in my Lloyds account to invest.
An investment company here in the Algarve suggested an investment bundle for my euros with 70% equity & 30% bonds of which 62% is in North America.
They then mentioned Woodville and said they could facilitate an investment with them but I would need to execute.
I asked them to obtain more recent details about them as I could only find info up to the end of 2021 on the net. They got back with info from Woodville for 2023.
I have read your blog & note your comment that after receiving private & confidential information about Woodville that your view became a little more negative.
Are you able to give me some indication why?
Can you give me some advice as to how I should invest this money.
I am nearly 65, am single, have 2 children in the UK in their early 30’s, own a 2 bed apartment in the Algarve which I airbnb for 2 months/year. I have a lodger for the other 10 months. No private pension. Had breast cancer last year so can’t expect too many years.
Hi Adam, I was considering investing 50000 in Woodville or are there still any A-rated banks offering close to 9%? Any advice?
Hi Adam, i got this product offered and i’d like to know about similar products and also the risk on this one when investing 100k
Sure I emailed you.
I’d like to know how much you have to invest to get insurance. Also, what does the insurance cover? You mention other a-rated banks offering 9%. I’m interested in low risk options.
100,000 sterling. however, insurance doesn’t mean “low-risk”.
Hi Adam ,
Please can you contact me as my farther is about to invest 200k of his retirement money into this company.