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Hedge funds ramp up purchases of LA wildfire legal claims
Bloomberg data reviewed by Hedgeweek shows transactions priced from about 3 cents on the dollar for some Palisades claims to around 60 cents for claims tied to the Eaton fire.
Hedgeweek, citing a Bloomberg report, says hedge funds are increasing purchases of legal claims connected to the 2025 Los Angeles wildfires, as California lawmakers have slowed efforts to restrict investors from buying rights to insurance recoveries.
According to transactions reviewed by Bloomberg, claim prices ranged from as little as about 3 cents on the dollar for some Palisades fire-related claims to roughly 60 cents for Eaton fire-linked claims.
Hedgeweek reports that investors are betting on the possibility of higher returns if they can recover more than their initial outlay through later legal settlements.
The fires, which devastated parts of Los Angeles in early 2025, generated an estimated $40 billion in insured losses, while California politicians had sought to curb the market after criticism that alternative asset managers were profiting from the disasters.