This Information Memorandum (“this Document”) has been prepared and issued by Fortress Legal Finance Limited, a private limited company incorporated on 9th December 2015 in England and Wales under company number 09910024 with its registered address at 5 Chancery Lane, London, EC2A 1LG (“the Company”) in respect of investment into an Unregulated Collective Investment Scheme (the “Offer”) to be issued by the Company and is issued solely for the purpose of seeking Investors under the Offer.

As this opportunity has been promoted and qualifies as an Unregulated Collective Investment Scheme and may therefore only be promoted to Investment Professionals or Advisors, Certified High Net Worth Individuals and Certified Sophisticated investors as detailed in COBs 4.12 of the FCA Handbook (‘Exempt Persons’). The protections normally afforded by the FSMA and compensation entitlements under the UK Financial Services Compensation Scheme may not apply.

The information contained within this document is therefore NOT intended for retail investors and you must therefore fall into one of the categories outlined above and within the distribution section.

The contents of this Document are not to be construed as legal, business or tax advice. Each reader of this Document should consult with their own legal, business or tax advisor as to legal, business or tax advice.  Any opinions expressed in this Document do not constitute investment advice. Independent advice should be sought from a person authorised by the Financial Conduct Authority (“FCA”) where appropriate.

First Financial Advisors Limited which is Authorised and Regulated by the Financial Conduct Authority, with registration number 186957 has approved the issue of this Document as a financial promotion in accordance with the provisions of section 21 of the FSMA 2000.  First Financial Advisors Limited is relying on the Directors regarding the content of this Document and has not made its own enquiries regarding the contents of this Document, except as to matters which have come to its attention and on which it considered it necessary to satisfy itself and except as required by the rules of the FCA to which it is subject. Unless agreed separately with a recipient, First Financial Advisors Limited will not be offering advice to the recipients of this Document and will not be advising any person (other than the Company) in respect of any applications for the units.

The scope of any such advice will be set out in a separate agreement. Other than as required by the FCA, First Financial Advisors Limited accepts no liability whatsoever for the accuracy of any information or opinions contained in this Document or for the omission of any material information, for which the Directors are responsible.  First Financial Advisors Limited  is acting exclusively for the Company and for no-one else in relation to the matters described in this Document and will not be responsible to anyone other than the Company for providing the protections afforded to customers of First Financial Advisors Limited or for providing advice in relation to the contents of this Document.  First Financial Advisors Limited is not communicating or issuing the offer or the Information Memorandum and any enquiries should be directed to the Company.

The Company accepts responsibility for the information contained herein. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Document is in accordance with the facts and does not omit anything likely to affect the importance of such information.

 

The Directors have taken all reasonable care to ensure that every statement of fact or opinion included in the communication is true and not misleading given the form and context in which it appears. Where this Information Memorandum contains information or representations acknowledged to originate from third party or publicly available sources, the Directors consider that the inclusion of such information is reasonable but claim no responsibility for its correctness in any circumstances.

The Directors have not limited their liability with respect to the form and content of this document.

The Directors have taken all reasonable care to ensure that any subscriber for units in the Fund (or their professional advisers) have access and can have access at all reasonable times to all information that they would reasonably require and reasonably expect to find for the purpose of making an informed assessment of the prospects of the Company and the investment opportunity in so far as it will affect the subscribers for units in the Fund, and of the rights attaching to the units.  All relevant documentation, including copies of this document, the instruments constituting the Fund and any form of acceptance are available from the Directors.

 

PROSPECTUS REQUIREMENT

This document does not constitute a prospectus as defined by the Prospectus Regulation (809/2014) and has not been prepared in accordance with the requirements of the Prospectus Regulation (809/2014).

 

REGULATORY STATUS

This Offer is not regulated by the Financial Conduct Authority. Investors will not have the benefit of the Financial Services Compensation Scheme and other protections afforded by the FSMA or any of the rules and regulations made thereunder. In addition, Investors may not have access to the UK Financial Ombudsman Service.

 

DISTRIBUTION TO INVESTORS

The communication to which this investment relates is exempt from the general restriction in Section 21 of FSMA on making financial promotions to members of the public where the promoter is not an authorised and regulated person for the purposes of FSMA on the basis that it is made to and only to certain groups who are exempt within the meaning of the FPO and/or COBS namely:

 

  • to persons falling within the definition of investment professional contained in article 19 of the FPO (“Investment professionals”) namely authorised persons;
  • persons who are exempt in relation to the promotion of investments of this nature;
  • persons whose ordinary activities involve them investing in unregulated schemes;
  • governments;
  • local authorities or international organisations;
  • or a director, officer or employee acting for any of the entities listed in this paragraph (a) in relation to engaging in investment activity (provided that the communication is made to the director, officer or employee in this capacity and when acting in this capacity they are involved in the entities’ participation in non-readily realisable securities (“NRRS”));
  • to persons falling within article 49 of the FPO (“High net worth companies, unincorporated associations etc.”) namely bodies corporate with called up share capital or net assets of not less than £5 million (except where the body corporate has more than 20 members in which case the share capital or net assets should be not less than £500,000);
  • unincorporated associations or partnerships with net assets of not less than £5 million;
  • trustees of high value trusts; or a director, officer or employee acting for any of the entities listed in this paragraph in relation to engaging in investment activity (provided that the communication is made to the director, officer or employee in this capacity and when acting in this capacity they are involved in the entities’ participation in NRRS);
  • to persons who fall within article 48 of the FPO (“certified high net worth individual”) namely a person who has signed, within the period of twelve months ending on the date on which this communication is made, a statement in the terms specified in Part 1 of schedule 5 of the FPO;

 

to persons who fall within article 50 of the FPO (“certified sophisticated investor”) namely a person who;

 

  • has a written certificate within the last thirty-six months by a firm confirming he has been assessed by the firm as sufficiently knowledgeable to understand the risks associated with engaging in activity relating to non-readily realisable securities and
  • who has signed within the period of twelve months ending on the date on which this

communication is made, a statement in the terms specified in article 50 of the FPO;

or

       [3] to persons who fall within article 50A of the FPO (“self-certified sophisticated  

investor”) namely a person who has signed, within the period of twelve months

ending on the date on which this communication is made, a statement in the terms

specified in Part 2 of Schedule 5 of the FPO;

 

and to any other person to whom the communication may otherwise lawfully be made in accordance with the FPO or otherwise.

 

The Offer is only available to such categories of person and any person falling outside these categories should not treat this information memorandum as a promotion to him or rely on it or act on it for any purpose whatsoever. The recipient of this communication may not reproduce, publish, forward or distribute, in whole or in part, copies of it to any persons except as permitted by FSMA.

 

DISTRIBUTION

This document is confidential and is being supplied to recipients for their own information. Recipients shall not directly or indirectly copy, reproduce, publish or further distribute this document and its content in whole or in part to any person, nor discuss with any other person the proposal in this document without the prior written consent of the Company, except for the purposes of analysis or evaluating this investment by advisers of the recipients who have agreed to treat such information as confidential.

 

This document does not constitute an offer to sell or an invitation to subscribe for, or solicitation of an offer to subscribe for or buy, securities to any person in any jurisdiction to whom it is unlawful to make such offer, invitation or solicitation. The distribution of this document outside the UK may be restricted by law. Therefore this Document should not be copied or distributed by recipients and, in particular, should not be distributed by any means including electronic transmission, to persons with addresses outside the United Kingdom and in particular in United States if America (including the States and the District of Columbia), Canada, Australia, Japan, the Republic of Ireland or South Africa, their possessions, territories and other areas subject to their jurisdiction, or to any citizens or residents and for the account or benefit thereof, or to any corporation, partnership or such entity created, organised or domiciled under the laws thereof. Persons outside the UK who come into possession of this document should inform themselves about the distribution of this document in their particular jurisdiction. Any such distribution contrary to the above could result in a violation of the laws of such countries.

Prospective investors should inform themselves of and observe all applicable laws and regulations including any taxation or exchange control legislation in the countries of their citizenship, residence, domicile or such other status as may be relevant in connection with any subscription for the securities under the Offer. In furnishing this Information Memorandum, neither the Company nor any of its directors or connected persons undertakes to provide the recipient with access to any additional information or to update this Information Memorandum or to correct any inaccuracies therein which may become apparent after issue and the Company reserves the right, without prior notice and without giving cause, to terminate the proposals and the delivery of information at any time.

Recipients or their officers, employees, agents and professional advisers should not contact employees, customers, agents or suppliers of the Company in relation to the proposals described herein.

 

 

MISCELLANEOUS

An investment in the Company may not be suitable for all recipients of this Information Memorandum and may expose an individual to risks that could result in the loss of all monies invested. A prospective investor should consider carefully whether an investment in the Company is suitable for them in the light of their personal circumstances and the financial resources available to them.

 

Prospective Investors are warned that they will need and be expected to make their own independent assessment of the Company and to rely on their own judgement (or that of their independent financial adviser) in respect of any investment they may make in the Company and the legal, regulatory, tax and investment consequences and risks of doing so. Investors should not expect to have legal recourse to the Company, its Directors or others if this Document is not complete or correct, or if they consider that their understanding of the present financial and trading position of the Company and of its prospects differs from the reality and the outcome for the Company.

 

The information contained in this document is confidential. It is made available only on the basis that none of the information contained in this document or subsequently supplied prior to or in connection with the proposed Offer may be published, reproduced, copied or disclosed to any person other than the recipient and its professional advisers, nor used for any purpose other than for the purpose specified above, and on the basis that the recipient shall, upon request, promptly return or destroy all material received from the Company (including without limitation this document) and associated documentation, without retaining any copies.

 

No person has been authorised to give any information or to make representations other than those contained in this document in connection with the Offer, and, if given or made, such other information or representations must not be relied upon as having been authorised by the Company.

 

Neither the delivery of this document at any time, nor any sales hereunder, shall under any circumstances create an implication that the information contained herein is correct as of any time subsequent to its date.

 

 

FORWARD-LOOKING STATEMENTS

 

All statements of opinion and/or belief contained in this information memorandum and all views expressed and all projections and forecasts or statements relating to expectations regarding the future performance of the Company are based on the Directors’ assessment and interpretation of information available to them as at the date of this document. No representation is given, or assurance made that such statements, views, projections or forecasts are correct or that the objectives of the Company will be achieved. Prospective subscribers must determine what reliance (if any) they should place on such statements, views, projections or forecasts.

 

The statements, including any forward-looking statements, contained in this Information Memorandum are made at the date of this Information Memorandum (unless some other time is specified in relation to them) and distribution of this Information Memorandum shall not give rise to any implication that there has been no change in the facts set out in this Information Memorandum since such date.

 

This Information Memorandum includes statements that are, or may be deemed to be, “forward- looking statements”. These forward-looking statements can be identified by the use of forward- looking terminology, including the terms “believes”, “expects”, “intends”, “anticipates”, “aims”, “estimates”, “may”, “will”, “would”, “could” or “should” or other variations or comparable terminology or, in each case, their negative. They include statements regarding the intentions, beliefs or current expectations of the Company concerning, amongst other things, the investment performance and prospects of the Company and the markets in which it invests and the issuing of. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and, accordingly, forward- looking statements may, and often do, differ materially from actual results.

 

Investors should not place undue reliance on such forward-looking statements, and the Company does not undertake any obligation to update publicly or revise any forward-looking statements, save as required by any applicable law or regulation.

 

All enquiries relating to this Information Memorandum or to a transaction involving the Company should be directed to the Company at the Company’s address.

 

If you have not received this document directly from the Company, or via an Authorised Person, your receipt is unauthorised. Please either return this document to the Company (at its registered address) or destroy this document immediately if this is the case.

 

THIS DOCUMENT SHOULD BE READ IN ITS ENTIRETY AND RELIANCE SHOULD NOT BE PLACED ON ONE SECTION (WITH THE EXCEPTION OF THE RISK FACTORS) IN PREFERENCE TO ANOTHER SECTION.

 

 

RISKS

The director believes an investment in the Fund may be subject to a number of risks. Before making an investment decision prospective investor should carefully consider all of the information set out in this Information Memorandum and the risks attaching to an investment in to the Fund and in particular the risks described below.

DISCLOSURE

Additional risks and uncertainty that are not presently known to the director or which the director currently deems immaterial may also have an adverse effect upon the Company. Moreover, the list below may not be exhaustive.

 

Prospective investors should carefully consider whether investment in the Fund is suitable for them in the light of information in this Investment Memorandum and their personal circumstances.

 

GENERAL RISKS

 

Operational Risk

Fortress Legal Finance Limited, its affiliates and subsidiaries (if any from time-to-time) are exposed to operational risk. Operational risk is the risk of losses that may arise as a result of system international law, inefficiencies, breakdown in interaction between internal and external processes, human error or the effect of any external negative factor. There can be no assurance that the Company will be able to prevent operational risks materialising, or mitigate the damage caused should such operational risks materialise.

 

Working Capital

The director considers that the Company will have adequate working capital to implement its current business plan for twelve months from the date of this Information Memorandum. However, the operational performance of the Company may require more working capital than is envisaged. There can be no assurance that the Company will have sufficient financial resources or be able to raise further capital on acceptable terms.

 

Reliance on Key Staff

The continued success of the Company will depend in large part upon the skill and expertise of the Company’s director and senior management. There is no assurance that the principals or other key members of that management will continue to be employed for any period. In the event of the death, disability or departure of any of such individuals, the business and the performance of the Company may be adversely affected.

 

Liquidity and Rights of Redemption

Unitholders will not be able to redeem any funds until the five-year fixed period. Redemptions will only be available after the five-year period. Early redemptions after year three are subject to the discretion of the manager. The Manager reserves the right to suspend or limit the rights of Unitholders to redeem all or part of their Units and/or receive all or part of their redemption payments with respect to redemption notices previously submitted at any time in the Manager’s sole discretion. In addition, the Fund may also withhold a portion or all of any proceeds of redemption if necessary, to comply with applicable legal, tax or regulatory requirements.

 

Current Market for Transactions

The business of identifying and structuring litigation investment involves a degree of uncertainty. There is no assurance that the Fund will be able to invest all of its committed capital or that suitable investment opportunities will be identified which satisfy the Fund’s investment objectives.

 

Lack of Liquidity of Investments

The Manager will endeavour to hold up to 15 per cent of the Net Asset Value of the Fund in cash and/or liquid investments to meet redemptions. However, Unitholders should note that there may be circumstances where the Manager will be unable to hold sufficient cash to meet redemption proceeds or where the Manager is unable to liquidate investments of the Fund in an orderly manner, in order to enable the Fund to pay any redemption proceeds, in which case the Fund may take longer than the time periods disclosed herein to effect settlements of redemptions; in addition, Unitholders may not be able to redeem all or any of the Units.

The Litigation cases will be illiquid. It may take considerable time to dispose or complete Litigation investments. 

 

Lack of Geographical Diversification

The Fund will only invest in UK Litigation cases. This is a concentrated geographical sector and market and therefore the success of the Fund is directly dependent on the state of the UK Litigation market which may undergo its own unique market cycles independent of other litigation markets.

 

No Secondary Market for Interests

There is expected to be a limited secondary market in the Units outside of the ability of Unitholders to redeem their Units in accordance with the procedure set out under the section headed “Redemption” 

 

Use of Side Letters and Modification of Terms

The Manager may in its absolute discretion agree with any introducer/intermediary and/or existing and/or potential investor in the Fund to waive or modify the application of any of the terms described herein or in any document governing such investor’s investment in the Fund or to grant to such investor additional rights and/or access to more information than is granted, or provided, to other investors.   The Fund may be subject to increases in operating and other expenses.

 

 

 

Operating Costs

The Fund’s operating and other expenses could increase without a corresponding increase in turnover or reimbursements of operating and other costs. Factors which could increase operating and other expenses include:

(a)          increases in the rate of inflation and currency fluctuation;

(b)          increases in taxes and other statutory charges;

(c)           changes in laws, regulations or government policies (including those relating to health and safety and environmental compliance) which increase the costs of compliance with such laws, regulations or policies;

(d)          increases in insurance premiums;

(e)          unforeseen increases in the costs to the Fund of maintaining cases; and unforeseen capital expenditure may arise as a result of defects affecting the cases which need to be funded, failure to perform by contractors or increases in operating costs.

 

Manager & Advisors

The success of the Fund will be dependent on the performance of the Manager and its advisers. No assurance can be given that they will succeed in meeting the Fund’s investment objective or that their assessments of the short-term or long-term prospects, volatility and correlation of the types of investments referred to in this document will prove accurate.

 

After the Event Insurance Policy (ATE).

Every individual case within the fund will benefit from an after the event insurance policy. We work closely with Quantum Legal Costs Cover and JLT Specialty. Before any insurance policies are underwritten our providers will conduct a very detailed analysis and review of each case. Whilst the scope of coverage provided by this form of Insurance is wide, this insurance will always provide indemnification for any adverse cost awards as made by the Court in favour of any Defendant. The main policy sought will provide coverage for Fortress Legal Finance legal costs and other disbursements (such as Expert’s and so on) directly connected with the Litigation process of every case itself. Typically, this sort of policy will provide coverage of a minimum of 30-40% dependent on the merits of each case. In the event that any case receives an unfavourable judgement all funds recovered from the ATE insurance will be reinvested within the Fortress Legal Finance Fund.