Here's a new asset class - investing in litigation. It's not yet legal in the US, but in other countires, it's possible to fund a lawsuit in exchange for a stake in the proceeds. This seems like a logical progression - there's already divorce settlement financing. This just extends the range of claims on litigation to equity stakes.
My guess is that the investment (if it ever catches on) would have pretty low covariance with most other asset classes, so it could be a good hedging mechanism.
What's next - derivatives on lawsuits?
HT: Marginal Revolution
