In a strategic pivot within the litigation finance sector, a new powerhouse has emerged on the horizon. Arcadia Finance, spearheaded by former Validity Finance leaders David Kerstein, Ronit Cohen, and Joshua Libling, officially launches today from its New York base. With access secured to over $100 million in capital, Arcadia aims to invigorate the landscape, focusing on both U.S.-based commercial and patent litigation, alongside international arbitration.
The move comes at a critical juncture for U.S. commercial litigation funders, who faced challenges in fundraising amidst shifting financial market dynamics last year. According to Westfleet Advisors, these funders experienced a 14% reduction in capital committed to new deals in 2023, signaling a plateau in industry growth with $15.2 billion in combined assets under management. Concurrently, the number of active industry players in the U.S. dropped from 44 to 39 during the same period.
David Kerstein, reflecting on Arcadia’s launch, expressed optimism amidst industry exits, citing a challenging capital-raising climate. He disclosed that Arcadia’s funding spectrum is set to range between $2 million and $25 million per deal, positioning the firm to capitalize on strategic investment opportunities.
While Kerstein declined to reveal specific investors, he confirmed Arcadia is backed by multiple U.S.-based financial institutions, including a major investor managing billions in assets. This robust backing underscores Arcadia’s confidence in navigating and thriving within the evolving litigation finance landscape.
The genesis of Arcadia stems from Kerstein and his co-founders’ departure from Validity in August 2023, following Validity’s strategic shift away from new commercial investments. The firm, backed by TowerBrook Capital, opted to focus exclusively on patent cases, a decision that led to staff reductions and altered investment strategies.
Validity founder and CEO Ralph Sutton and representatives from TowerBrook declined to comment on these developments.
As Arcadia launches into this competitive arena, its foundation on substantial capital and seasoned leadership positions it as a pivotal player poised to redefine the future of litigation finance.
