Woodsford Group Ltd., a UK litigation funder, is aiming to sell its portfolio of passive US investments so it can focus on large-scale lawsuits that allege corporate wrongdoing.

Woodsford is meeting with potential buyers it declined to identify. The company wants to move on from investing in cases that law firms generate and instead wants to identify and organize suits on its own, Woodsford’s chief executive officer, Steven Friel, said in an interview.

“One of the ways in which we can fuel our growth—get cash for our growth and also re-position ourselves—is by pursuing a secondary market transaction,” Friel said. He declined to describe the size or value of the portfolio Woodsford aims to sell.

Litigation finance is a $13.5 billion industry in which investors pay lawyer fees and other lawsuit costs in return for a portion of the award if the case is successful. Woodsford’s UK peer, Burford Capital, invested $16.6 million in an investor suit against Argentina and is in line to collect about $6.2 billion after a successful award this month.

Woodsford is a stalwart of the growing litigation finance business. The firm is funding a 2020 lawsuit by 120 institutional investors seeking $418 million from Barclays Plc over a sharp drop in shares after allegations about dark pool trading systems surfaced, Bloomberg News reported July 12.

The 13-year-old company has teams in the UK, Australia and the US. In 2018, Woodsford announced that the family office of its chairman, Yves Bonavero, increased its investment by $100 million, bringing the company’s total capital available to several hundred million.

Secondary Deals

As the industry has grown, a secondary market for litigation finance deals of the type Woodsford is pursuing has emerged. Gerchen Capital Partners, which raised $750 million to purchase existing claims, closed on a deal in June with Omni Bridgeway for the purchase of a $38 million fund.

“Secondary transactions are definitely a part of the every day in litigation funding now,” said Ted Farrell, founder of Litigation Funding Advisers. “These deals are happening, some of them of really substantial size.”

Woodsford’s transaction is intended to help it devote more resources to identifying large-scale corporate wrongdoing that caused a loss to a large group of stakeholders—usually shareholders or consumers, Friel said.

Woodsford then aims to brings attention to the wrongdoing and organize stakeholders into a group to seek compensation on a non-litigious basis, he said. If that doesn’t work, Woodsford would provide funding for litigation, Friel said.

The company decided to shift away from passive investments that law firms bring forward after identifying a gap in the market as a result of a decade-old US Supreme Court ruling. The 2010 ruling found that securities cases with significant foreign elements cannot be tried in the US.

Friel said Woodsford wants to find securities suits that previously would have been under US purview and to then orchestrate them abroad. Though the cases would be outside the US, many of the claimants—asset managers, state retirement funds, and pension funds—are not, he said.