So that’s really how that ended up happening. I’m always delighted to be offered the opportunity to speculate and pontificate a little bit about the future with your first question, and — but I have an eye on the clock, so I will only do a little bit of this, and Jon might chime in as well. I think that when we think about innovation, it comes in a few categories. One is in the core business itself, where, as you say, we have really led the industry in developing a whole suite of offerings to clients that started with a very basic product that I outlined to Portia and has now turned into really a multi-hundred-million-dollar traditional set of corporate finance tools. And so, we continue to innovate in the core business. But couple of things that really do excite us.
One of them is certainly around data science. We have made significant investments in this business in data science over the past half dozen years. We believe we have the — by far the industry’s largest data set. We are increasingly using machine learning and other artificial intelligence style tools to add quantitative rigor and the benefit of that data set into our investment process. We have a number of professionals in the firm who are not lawyers at all, who come from pure scientific and analytic backgrounds. And that — every year that goes by, that becomes a more and more and more significant and valuable part of our investing process, and we now are very quantitative in addition to being legal and qualitative in terms of how we go about looking at things.
So that is an area, I think, of continued growth. And because we’ve been ahead of the curve and spending time and money on that area, that equips us to go and look more broadly at continued disruptive opportunities caused by pretty rapid growth in the cycle times and in the capability of AI style technologies. So that’s one clear area. Another is insurance. Insurance and litigation finance are really sort of two sides of the same coin. We have a small insurance business, as you know. And I think we regularly consider the question of whether there’s more for us to do in the insurance space. Jon, you may want to comment and on the law firm equity.
Jonathan Molot: Sure. So, I guess, I’d say as chief investment officer, I’m guided by two overarching principles that have fueled our development of new products and offerings in new areas. One is we are simply the best, and our abilities and offerings are unique when it comes to the intersection of law and finance. Meaning for years before we were around, the capital markets ignored the market for legal services, and the market for legal services didn’t have access to finance. And so, we increasingly just see a broader array of opportunities of people in the legal space, whether it is corporates with claims, law firms with business that don’t otherwise have access to capital for those claims, or that business that we can provide, and there’s no doubt that because we are so prominent in the space, we do receive inquiries and we develop relationships with people who are doing things that are somewhat different, slightly different from what our traditional counterparties have done that are structured slightly differently, whether it’s different kind of cases, different kinds of arrangements, and so that we can make money by bringing capital to legal risk.
The second guiding principle is we don’t ever want to lose our shareholders’ money on something that we didn’t understand. When I showed you the slide of the three outcomes, it goes to adjudication, we win or lose or it settles, as long as we have properly evaluated the risk beforehand and understand there will be some losses, but as you can see from our track record, those losses are manageable and much smaller than the wins, that is the result of us not making bets where we don’t truly understand the risk. So those are the guiding principles. As Chris said, there are lots of tools we could bring to bear and lots of offerings — insurance is a perfect example. As Chris said, the ability we have to bring capital and to analyze legal risk positions us to be able to do offerings that way.
And we have deployed quite a bit of capital on the defense side in cases, and there is a respect, as I’ve talked about, in which the progression has been toward specific project finance for individual cases into larger portfolios, which is almost like finance for a business or business line for a law firm. It’s a large chunk or perhaps all of their business, and for a corporate, it’s for the general counsel’s office or whatever the business unit is that has the claim. And equity financing can be the next step, as long as you understand the underlying risk and promise of the venture you’re investing in.
Julian Roberts: Thanks very much. Very clear, very interesting.
Christopher Bogart: Thanks, Julian. Now we’ve got a webcast question from Michael Bancroft. If Argentina aren’t successful in getting a stay, when will they have to post a bond in order to appeal, and will this bond be the full amount of the award or a lesser amount? Finally, what is your best guess as to when we hear the outcome of the motion for a stay? I think the question misapprehends what is happening in the US a little bit. So let us step back and be very clear about this because these are unrelated dynamics. So Argentina has appealed and — as have the Petersen plaintiffs and Eaton Park cross appealed. Those appeals are going to go forward regardless of bonding and regardless of any sort of stay. There’s an unqualified right to appeal, and that right is not affected by what’s going on with the judgment, the underlying judgment.
The issue around a stay and a bond is that if you bond the appeal, if you post a bond for the amount of the judgment, then the judgment is not enforceable while the appeal is pending. If you don’t post a bond, and Argentina has said here that they are not going to post a bond, if you don’t post a bond, then generally the judgment is enforceable while the appeal is pending unless the court grants a discretionary stay. And so, the question before the district court right now is, will it exercise its discretion to grant a stay, even though Argentina has made it clear that it will not and cannot post a bond? Or will the judge adopt the usual practice of not staying enforcement of the judgment while the appeal is pending? So that’s the issue before the court.
