George Soros is betting on American personal injury lawsuits.
The billionaire’s Soros Fund Management ($27 billion) is bankrolling a company called Mighty Group, which gives cash advances to plaintiffs in hopes of settlements, and takes a cut of the money, Bloomberg reports.
Mighty Group, which is turning its lawsuits into investment portfolios, fronts $2,000 on average to plaintiffs. Most claims are car- and construction-related accidents. The advances usually cover rent or medical treatment, while plaintiffs are awaiting verdicts. If a plaintiff loses the case, they are not obligated to return the advance.
The company has faced national backlash from the US Chamber of Commerce and the insurance industry for profiting from and encouraging American lawsuit culture.
By funding Mighty Group’s cases, Soros could be reaping an average 20% per year in returns. According to Bloomberg, this avenue offers steady and predictable returns at a low risk, and with Soros subsidizing some of these lawsuits, that could reduce that risk even further—for him. His investment is part of a $100 million capital raise among institutional investors.
While one of the first institutional investors, the man who broke the Bank of England is not alone in funding the personal injury industry. Hedge fund Apollo Capital Management, which has $248 billion in assets as of December 2017, is also joining the fray.
Tags: George Soros, Mighty Group, Personal Injury