PHUKET: One very exciting new asset class available to individual investors that I have been looking into is litigation funding. When I first heard about some notes attached to this I thought it sounded too good to be true and dismissed it, but as sometimes is the case, extraordinary opportunities can arise.
The asset class is currently only accessible via structured notes, but these work very differently than most other forms of investment, which I usually think are a rip-off. I have heard a fund structure is currently being put together for listing on the Irish exchange and this really excites me.
Litigation is expensive and often fairly clear-cut cases are not tried because the costs of going to trial are prohibitive. We all know the story of David and Goliath, and many big corporations often get away with misdeeds simply because it is too difficult to fight a “Goliath” team of high-paid of lawyers.
Litigation funding levels the playing and helps David. The notes I have looked into have always been commercial litigation, so it is not helping lowlifes chase frivolous cases hoping for a quick buck.
The interesting thing is that insurance companies will actually insure cases they consider to be clear-cut. The costs are included in the structure and insurance costs are even covered in the insurance. So, if the case is lost, the insurance company is on the hook and the investors have their capital protected.
I am not a big fan of guarantees, but this one appears to hold water. Insurance companies are not big risk-takers, and they only insure cases that are “sure” wins. As such, the win ratio of funded litigation is very high – and the premiums collected are pretty large as well, as insurance companies aren’t charities, either.
Despite the costs of insurance and financing, the potential take from profitable lawsuits can be large, as well as participation in the award amount.
Apparently the market for unfunded litigation is enormous. As it stands now, the cases never move forward because the companies can’t afford them and the litigation funding market is still relatively small.
I am not yet convinced of the actual way this opportunity is packaged, but I am still doing my homework and waiting to see how things unfold for some people who I know are willing to be investor guinea pigs.
However, I am convinced of the concept, but in the investing world that isn’t enough. You may have known computers were the future 25 years ago, but if you threw all of your money into Tandy you’d probably be kicking yourself now.
The reason I believe this asset class could become exciting very quickly is that it is completely unrelated to traditional and even almost all other alternative asset classes. It doesn’t matter what is happening in the stock markets, bond markets, economy or elsewhere.
Litigation funding could be a great addition to a portfolio to lower overall volatility and increase returns. I will continue to see how this market grows and will most likely be writing about this again in the future.
I would be very careful, however, of sticking a large percentage of your portfolio into a new asset class – at least “new” in terms of being geared towards individual investors, as there has been corporate litigation funding for quite some time.
David Mayes MBA provides wealth management services to expats around the globe, specializing in UK pension transfers. He can be reached at [email protected]
— David Mayes
Hermès opens its first store in Phuket at Central Floresta
Hermès has opened of its first store in Phuket at Central Floresta, the newly opened lifestyle shopping destination in the heart of the island, opposite Central Festival.
As Hermès’ first venture outside the Thai capital, the new Hermès Phuket store makes a significant statement of expansion and confidence in the market. The new address in this world-renowned island will allow the growing population of local residents, along with domestic and international tourists, to discover the abundant variety of Hermès métiers and savoir-faire.
Designed by the Parisian architecture agency RDAI, the elegant 172 m² retail space is located by the shopping centre’s main entrance and benefits from a double exposure with an exterior and an interior façade.
A bamboo claustra follows the line of the mall’s exterior glass, filtering the daylight that bathes the indoor space, and further illustrates Hermès’ high regard for local craftsmanship. The interior façade is composed of a refined lacquered metal, featuring a large window display, complemented by four recesses with illuminated silk scarves.
Upon entering the store, visitors are welcomed by the House’s ex-libris and signature Grecques lights, designed for Hermès in 1925. The store is decorated with natural and local materials – bamboo floors and claustra, cognac toned Cherrywood walls, toffee coloured silk and fibre fabrics – tastefully blending various elements of Thai culture and modern architecture. The soft colour palette evokes the sand and the sun in their various shades, providing a delightfully serene and convivial atmosphere.
The overall volume is divided into two main areas by the feminine silk grid facing the entrance. The first one, with the iconic Faubourg pattern mosaic floor, allows guests to explore the silk, fashion jewellery, fragrance, art of living, and equestrian departments.
Opposite the leather goods display, an intimate space invites guests to uncover the watch and jewellery collections. Further along, one can discover the women and men’s universes. A sand coloured carpet on the floor outlines the area dedicated to the shoe collections, enriched by a delicate custom-made bamboo light module as the ceiling centrepiece.
Thailand ‘slightly impacted’ from a no deal Brexit
The EU has agreed to postpone Brexit from next Friday and give UK PM Theresa May time to get her deal approved in Parliament.
The PM had hoped to persuade the EU to delay the March 29 Brexit date, set in law, to June 30. But the EU country leaders have offered her two dates…
- A delay until May 22 if MPs approve her withdrawal deal in next week’s vote.
- 2. A shorter delay until April 12 if they reject it. But the UK will have to set out its next steps – another extension or leaving without a deal.
But the EU says a further extension beyond April 12 is only possible if the UK agrees to hold EU elections on May 23.
As to how British lawmakers can sort things out in a few weeks after two years of debate remains to be seen.
But economists are warning Thailand to brace for some fallout from the UK exit from the EU because it is more likely to happen than not, just a matter of when.
First of all, no-deal Brexit means the UK will no longer be a part of the EU bloc and will have to revert to World Trade Organisation rules on trade. Made-in-UK goods will be subject to EU tariffs, like that of other non-EU nations. Meanwhile, the price of the EU-made merchandises in the UK may become more expensive as they will have to bear the cost of imported tariffs as well.
According to SCB Economic Intelligence Centre, a no-deal Brexit will impact the UK economy and, consequently, affect British purchasing power overseas. British demand for Thai exports, namely automobiles and parts, and processed chicken meat may reduce.
British expats will also have to face a worsening rate of exchange with the Thai baht, lessening the power of the British pound they bring into the Kingdom for living, retirement or holidays.
Nonetheless, the overall impact on Thai exports should not be significant because the Thai outbound shipment to the UK represents only 1.5 percent of total Thai exports, according to the the think tank of Siam Commercial Bank.
Brexit may also prompt Thailand and the EU to renegotiate some trade deals such as import quota to the EU. Thailand may have to renegotiate the export quota with the EU on processed chicken, as an example. And Thailand may also have to negotiate another chicken export deal with the UK separately after the UK separation from the EU.
Auramon Supthaweethum, Director-General of Department of Trade Negotiations, said Brexit could complicate the process of Thai-EU free trade negotiation, which is scheduled to resume in the second half of this year.
“At any rate, after the Thai general election, Thailand is set to continue to negotiate with the EU on the Thai-EU free trade deal regardless of the UK decision.”
On the bright side, Brexit may prompt the UK investors to pay more attention to potential markets beyond the EU border. At present, direct investment from the UK to Thailand is small, accounting for only 3.5 percent of the total foreign direct investment, according to SCB.
Kasikorn Research Centre note that in addition to Brexit, Thai investors should take into account the consequences of the EU and Japan’s Economic Partnership Agreement which came into force last month.
The EPA could affect the exports of Thai automobile which is part of the Japanese’ supply chains. The EPA will end tariffs of auto and parts between Japan and EU by 2026.
Kasikorn Bank’s think tank says, in light of Brexit, some Japanese automakers will likely relocate some of their car production from the UK to other EU countries to maintain the EU trade privileges. Nissan and Honda have already flagged this probability.
Thus, the destinations for Thai exported automobiles and parts, which are part of the supply chains of Japanese automakers, may also change in accordance with Japanese automakers’ revised business strategy.
While the actual impacts on trade and investment remain to be seen, Brexit has been chiefly attributed to the volatility of the British pound since the referendum in 2016.
The SCB Economic Intelligence Centre say the weaker British pound could dampen the sentiment of British arrivals. They note that UK holidaymakers are among the high spenders in Thailand with 77,600 baht per trip.
“At any rate, since the receipts from British travelers represent only 2.1 percent of the total, the impact on the Thai tourism industry will be insignificant.”
Doubt over ‘majority support’ in survey about drilling near Si Thep historical park
Locals are up in arms about results from a public hearing into oil drilling project near the Si Thep historical park in Phetchabun province (just north of Bangkok). They are expressing doubt and concern over results of a public hearing that appear to show support for the project.
Thai PBS reports that Mr. Prachuab Narkthien, chairman of the club of village headmen and kamnan in Si Thep district, says he doubted the credibility of the result, which shows 62.6 percent are supportive of the drilling project near the ancient temple.
Since most people in Phetchabun province, especially in Si Thep district, have opposed the project from the beginning, Mr. Prachuab said he wondered where the 62.6 percent figure had come from.
Oil drilling by ECO Orient Resources was put on hold due to strong opposition from the Fine Arts Department and the public for fear that vibrations caused by drilling may damage the fragile ancient ruins, which await recognition by UNESCO as a World Heritage site.
Mr. Prachuab said that the public hearing was unusual because only selected people were invited to attend and he was not invited, despite the fact that he represents the district’s cultural network. He went on to say that only officials at provincial and district levels support the project while the general public is against it.
The Fine Arts Department earlier proposed the creation of a buffer zone to project the ancient ruins, believed to be those of a city of some 80,000 people at its peak during the first millennium AD.
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