China-related claims,underwritten by a team that has enforced in China.
Most funders encounter China-related claims late, at second hand and with no view on enforcement. Each matter presented to our capital partners has passed a seven-dimension assessment and an independent review signed by a named lawyer, and carries a view of where the debtor’s assets actually sit. A judgment does not track rates or an index; whether it pays depends on reachable assets. That is an underwriting question, not a macro one.
Three reasons to allocate, two for caution
A presentation that omits the second half is not worth reading, so both halves are set out here.
Recovery turns on the facts and on enforceability. Portfolio performance in 2020 and 2022 showed no identifiable relationship to equity or credit markets.
The discount reflects how accurately the underwriting team reads collectability. That edge scales with capability rather than with borrowing.
The maximum loss on a matter is the amount deployed plus any adverse-costs security given — both known before deployment.
Matters run eighteen to forty months and the timing cannot be forecast. A secondary market exists but is thin and prices at a real discount. This is not capital that can leave early.
Portfolio averages hide how binary individual matters are — most recover well, a minority go to zero. Averages are meaningless below a certain sample size.
Indicative only and superseded by the constitutional documents. Not an offer.
What a claim passes through before it reaches investors
Public cards are redacted because counterparties require it. Behind them is the same file on which our investment committee votes.
Scored on seven dimensions
Merits 25, claim-to-cost 20, recoverability 15, enforcement venue 15, duration 10, counsel 10, legality 5. Scored from the file first, then challenged line by line.
Reviewed independently, signed by name
Every score is reviewed by a lawyer who did not originate the claim. Scores can be overridden, but the original stays on the record beside the change, and the reviewer signs the assessment.
Redacted, but verifiable
Public cards show type, forum, claim band, funding sought, expected multiple and stage. Registered investors see the dimension scores, security structure and milestones; diligence opens the underlying file under NDA.
Priority return
Capital is repaid from recoveries ahead of the claimant’s share, in an order fixed before deployment. No matter exceeds 12% of commitments, and no enforcement jurisdiction 30%.
We invite diligence on the firm before any on a claim.
We will send the concluded-matter file, including the losses, before any subscription conversation.