Securities class actions can be complicated. On top of this, they can end up being a long drawn out battle which can extend over several years. Monetizing securities class action claims needs an in-depth analysis into a Fund’s trading history. Lake Avenue Capital, a company based in Connecticut, has been excelling at delivering exactly this since its inception in 2011.
We talked to Lake Avenue Capital’s Managing Partner, Shane Kinahan, to know what has driven their success over the years.
Tell us about your company.
Lake Avenue Capital, LLC (LAC) was founded in 2011 for the purposes of securities class action settlement claim purchasing. Our Company enables other Companies to immediately monetize their securities class action settlement claims due to a funds liquidation as a result of closure or return of capital to outside investors.
What makes Lake Avenue Capital (LAC) unique?
We use our proprietary valuation model to analyze a Fund’s transaction data against our extensive database of securities class action litigations, both settled and pending. After researching the extent to which claims have already been filed, we determine the potential eligibility for future claim payments. Based on this analysis, we then provide the fund with a purchase offer. Due to the highly automated nature of our transaction processing and claims valuation process, we typically present offers very quickly, with complete transactions being executed in as little as a week.
How would you say that LAC measures up in the industry?
LAC has been a leader in the space for nearly ten years now. In that short duration, we have been able to make more than 300 transactions with very well-known institutional investors, including mutual funds, hedge funds, and other asset management companies.
Why should a fund choose to work with LAC while liquidating their portfolios?
Funds need to meet their fiduciary requirements by acting in the best interests of the investors and by adequately compensating the investors for their share of future settlement claim payments. They do this through monetizing future claim payments at the time of liquidation.
Further, the average lifecycle of a securities class action settlement is 4 years and 7 months. That is a long time for a Fund to be kept open while waiting to be paid on a single claim. By selling their claims rights to LAC, the Fund can be instantly monetized.
How do you stay relevant?
We have close to 100 years of collective industry experience in the trading, financial analysis and financial processing sectors. Through strategic key hires, our company has been able to cultivate thousands of relationships from Wall Street to Main Street. As the space consistently grows year over year, LAC bolsters its global footprint through a constant expansion of its network in not just the U.S., but also all around the world. In the past five years, the landscape surrounding the security class action space has risen exponentially and grown quite complex. To stay relevant, we constantly monitor market trends and fund liquidations. Additionally, we stay on top of the news to know when the funds could be in the process of liquidating or to identify certain sectors of the industry which are struggling for the past three months or over consecutive quarters.
As the market grows more competitive, how does LAC standout?
The expertise of LAC cannot be matched. For nearly ten years, the Company has been trusted in the class action settlement purchasing space and strives to provide the most aggressive bids in the claims monetization space. While others try to compete with us, they simply cannot provide the seamless, thorough, and transparent process that we offer. We place the best interests of the transaction counterparties above everything else.
Where do you envision the company in 2020 & beyond?
LAC continues to grow every day. In today’s volatile, changing, and burgeoning market, there are Funds that are being launched, liquidated, and slowly being closed down. We continue making impressive investments into our workforce, expertise, and systems innovations to make our already seamless process even more automated and accurate.
Shane Kinahan, Managing Partner
Shane Kinahan has extensive industry knowledge and is a seasoned veteran of the equity brokerage industry. Prior to Lake Avenue Capital, Mr. Kinahan worked for Goldman Sachs in the Equities Division where he specialized in Electronic Trading/ Algorithmic Trading. Here, he was responsible for many of the firm’s electronic trading relationships with hedge funds, buy-side institutions and broker/ dealers. He has also worked with NYFIX Inc., as a head of buy side sales for NYFIX Millennium ATS. He began his career as a private wealth management representative. He holds a B.A. from Bentley University.
"Lake Avenue Capital utilizes a proprietary valuation methodology in order to present funds with an offer of purchase for their future class action settlement claim payments, enabling them to properly close out a fund or portfolio and monetize future claims for investors."