On the Patience of Capital.

A dispute worth financing is rarely a dispute in a hurry. That sentence, plainly stated, is the whole of our first commitment to those we underwrite.

Litigation of consequence moves at the pace of adjudication, not of markets. A well-pleaded commercial case, tried on the merits and defended by capable opposition, will take between two and five years to reach a determinative outcome. Enforcement, where it is necessary, adds its own quiet interval. Any funder who tells a claimant otherwise is either inexperienced or unserious.

We prefer to be neither. Every commitment we make is priced against the assumption that the matter will consume the whole of the horizon it is likely to require, and that our return will be earned only at the far end of that horizon. This is why our duration bands begin at two and a half times invested and rise from there. Nothing in the schedule contemplates a swift settlement as the base case.

The alternative, capital that expects to be rewarded in eighteen months, distorts the case it funds. It pushes claimants toward settlements they should refuse and counsel toward postures they would not otherwise take. It replaces the discipline of adjudication with the impatience of a balance sheet. We regard that as a failure of underwriting, not a feature of it.

Patient capital asks something of the funder as well. It asks that our own reporting be measured, that our conversations with counsel be infrequent and substantive, and that our interventions be limited to those we are contractually entitled to make. The Non-Interference Doctrine we publish elsewhere is not a slogan. It is what patience looks like when it is written down.

For the claimant, patience is a reciprocal discipline. We ask that the matter be pursued with the seriousness of its facts, that counsel be selected on the basis of competence rather than convenience, and that the settlement calculus be conducted with the horizon in view. A meritorious case pressed patiently is worth more, in every honest sense, than the same case pressed to closure at the first acceptable offer.

We do not publish this letter to lengthen expectations for their own sake. Patience is not a virtue we impose. It is simply the condition on which capital of this kind is deployed at all. Those who share it will find our commitments easy to live with. Those who do not are almost certainly better served by another class of finance.

— The Investment Committee