A team of former lawyers is bringing a new asset class to investors with the launch of a closed-ended fund investing in litigation cases.

Therium Capital Management (TCM) expects its Therium Fundco investment company to be listed on AIM on 3 August.

Therium Fundco intends to fund legal cases with a minimum cost of £100,000 and a maximum of £5 million per case. It is targeting an average return of 250% of the original investment in each case. 

The fund managers have already provided funding for one case, which TCM said has been settled at its return target.

The trust will also invest in after-the-event insurance to create an income source. The insurance provides cover for legal costs in the event the claimant loses a case.

Therium Fundco has a projected dividend yield target of 5% and has a five-year life before it converts into a run-off vehicle. It will also levy a performance fee of 12% subject to NAV growth in excess of 6% a year with a high watermark.

The fund is the second tapping the trend. Juridica Investments Limited, which listed on AIM at the end of 2007, focuses on US cases. In the 12 months to the end of 2008 Juridica’s NAV rose by 30%.

It has attracted several star fund managers, including Jupiter’s Anthony Nutt, who holds 15 million shares in the trust via his Jupiter Income fund, and Artemis’ Citywire AAA-rated Derek Stuart, who holds five million shares. Invesco Perpetual’s A-rated Neil Woodford is also said to have a position in Juridica.