Fortress Targets $1 Billion for Latest Litigation Finance Fund

Fortress Investment Group is seeking to raise about $1 billion for its latest fund in litigation finance, a sector in which it’s becoming a powerhouse, according to people familiar with the matter.
The new fund, dubbed Fortress Legal Assets Fund II, would be more than double the size of the prior version that closed in 2021, the people said. A representative for Fortress declined to comment.
Litigation finance involves providing funding to law firms and companies in legal battles to get a share of the payouts. Once on the fringes of alternative investing, backing lawsuits has become a multi-billion-dollar industry.
Fortress will look to invest the new capital in legal assets, litigation finance deals and regulatory-driven situations, said the people, asking not to be named as the details are private. The vehicle would target about 16% net returns, one of the people said, noting that would be in line with the firm’s track record.
The New York-based investor is already a leader in the sector, with $6.8 billion in commitments. It has backed law firms behind some of history’s biggest mass tort suits, such as the Roundup cases against Bayer AG and talcum powder litigation against Johnson & Johnson. And as an investor in patents, Fortress pursues alleged infringers in court, taking on tech giants like Apple Inc.
Related: Fortress Has Plowed $6 Billion Into Other Companies’ Lawsuits
Its latest fund raising comes as credit investors are seeking to diversify their strategies, moving to asset-based finance and other esoteric markets and away from traditional corporate direct lending. That’s because a rally in credit has made assets expensive.
Earlier this month, Jack Neumark and Joseph Dunn, who lead the firm’s legal assets division, reached out to investors on the latest stage of the fund raising, the people said.
Fortress has been consistently originating over $600 million in new legal asset transactions each year, Neumark said in a Fortress released interview in May. Such deals could be structured as debt, asset purchases, preferred equity or equity stakes, according to its website.