Arrowhead underwrites each of its investments in-house. The underwriting process begins when a case or portfolio of cases is presented to Arrowhead by counsel, plaintiff/claimant or a broker. We determine at a threshold level whether the proposed case or portfolio will qualify for investment, focusing on the facts and economics of the case or portfolio. Should the matter warrant further investigation, we proceed with a detailed underwriting which moves in parallel with the documentation process. If we don’t think a case qualifies for investment, we make that decision quickly, so the client may consider other potential solutions. We believe that a quick “no” leads to quality future “yes” opportunities.
In addition to a comprehensive review of the claim, we consult with our network of independent attorneys and experts with specific domain expertise. We always meet with the plaintiff/claimant and counsel. We find this critical to underwriting the potential investment. It has the added benefit of fostering a positive working relationship, particularly as we work together after funding as the case develops. Arrowhead views the underwriting process as an iterative dialogue with our clients. While the process is time and labor intensive, and can take from a few weeks to several months depending on the complexity of the matter, we pride ourselves on our transparency and commitment to clear client communication. Generally, we proceed in parallel from a preliminary indication to a term sheet and, finally, to an executed set of transaction documents.