Hedge Fund Buying Claims From 1983 Terrorist Attack

Mar 24 2014 | 2:10pm ET

Iran is still a pariah in the international community, but one hedge fund thinks it will eventually pay $1.8 billion as ordered by a U.S. court.

RD Legal Capital hopes to raise up to $100 million to buy the rights to payments from families of the 241 U.S. Marines killed in a terrorist attack in Lebanon in 1983. A federal court in 2007 found Iran liable for the truck-bomb attack, which led to the withdrawal of U.S. troops from war-torn Lebanon.

Iran, of course, is not on the best of terms with the U.S., and the two countries do not have diplomatic relations. Still, Iran’s central bank is appealing the $1.8 billion verdict against it.

Victims’ families agreed to allow RD to buy stakes in the judgment. The firm will not buy out any of the beneficiaries, instead investing only in pieces of each of the 151 claims. The Iran fund is RD’s first ever focused on a single case, The Wall Street Journal reports.

It is unclear how much RD is paying for the stakes, although it generally buys claims for 18% to 24% below face value. It will charge investors a 30% performance fee—10 percentage points more than it usually levies.

RD is not financing the work of the law firms representing the families.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...