In this post, we’ll review Woodville loan notes from Woodville Consultants Limited, a litigation funding firm based in the UK. They offer funding options for arbitration and litigation that are suited for prospective investors, companies, and law offices.
Their loan notes are designed to provide investors an opportunity in the litigation finance market.
This sector is reportedly developing amid recent setbacks in terms of new commitments, helped along by consistent demand in important practice areas. Growth is projected to continue in 2024, albeit with the rather difficult backdrop.
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We’ll look into what the terms and features of the Woodville loan notes are, investment minimum, as well as advantages and disadvantages. But before those, we’ll first briefly discuss the meaning of loan notes.
Make sure to reach out to an expert before making any move, as this review alone isn’t enough for any investment decision to be based on.
What is a loan note?
It is an increasingly common fixed-income instrument among investors seeking safer, higher-yielding substitutes for conventional equities and bond.
How do loan notes work?
Essentially, an investor makes a loan to a borrower for a predetermined interest rate, with the principal amount due at a later date.
Woodville Loan Notes Features and Terms
With three investment options—a one-year term with a 10% annual return, a two-year term with an 11% annual return, or a 36-month term with a 12% annual return—Woodville offers qualifying investors a fixed income distributed every quarter.
The After-the-Event or ATE insurance is a crucial component of Woodville loan notes investment; it lowers financial risks for both the funder and the claimant by paying for the expenses of rejected claims.
Rather than depending solely on high success rates in individual cases, Woodville’s portfolio places a strong emphasis on diversification, distributing risk over a large number of loans. The company only funds short-term maturity loans in the more liquid market. It usually funds small cases (worth up to 3,000 British pounds) that bigger corporate litigation funders would otherwise pass over.
What’s the investment minimum for Woodville loan notes?
A minimum of 10,000 US dollars, pounds, or euros is needed to subscribe to Woodville loan notes. Professional advisers and eligible investors are the only ones allowed to participate.
Are Woodville loan notes safe?
If a claim is successful, Woodville will get the majority of the recovered funds from the cases they sponsor, guaranteeing loan note repayment.
A charge on the assets or income of the legal practice managing the cases could also be used by Woodville to secure the loan notes. This adds another degree of protection because it implies the firm may be able to recoup its investment from the assets of the law practice should the lawsuits do not result in the anticipated profits.
Every loan is also supported by an ATE insurance coverage that is customized to meet its unique requirements, as mentioned earlier.
What are Woodville loan notes fees?
There are no explicit fees associated with Woodville loan notes; instead, all expenses are included in the rate of return that investors get.
Pros and cons of Woodville loan notes
Purchasing loan notes from Woodville reduces total investment risk by providing investors with a low-risk, diversified way to enter the litigation financing industry.
Funding is subject to the placement of ATE insurance, which eliminates the possibility of interest default.
The fact that this investment is not subject to FCA regulation and is not insured by the Financial Services Compensation Scheme should be noted because this puts cash at risk.
There is also a chance that Woodville Consultants can’t make their principal or interest payments. This could cause a delay in the availability of invested funds until the investment’s maturity.
If you invest only in Woodville Consultants, you run the risk of concentration; their potential financial instability could have a big effect on the value of your investment. It’s better to diversify your holdings to minimize your risks.
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