Screenshot of Fortress Investment Group's website.

Global investment manager Fortress Investment Group has shuttered the U.S. and Germany offices of Vannin Capital after announcing its acquisition of the litigation funder in September.

At the time of Fortress' announcement, Vannin employed six managing directors in the United States and one in Europe. All of these personnel are gone from the company's website, as are references to Vannin's offices in New York, Washington, D.C., and Bonn, Germany, along with Melbourne, Australia.

Vannin retains presences in London, Sydney, the Isle of Man, Jersey and Paris, according to the company's website.

"Fortress has instituted certain changes to the organizational structure of Vannin to take advantage of synergies with its own legal assets business," Fortress managing director Gordon Runté said in a statement Friday. "Vannin investment professionals based in Europe and Australia are active in the market and continue to source, originate and manage litigation finance opportunities across a broad spectrum of case types."

The September announcement of the sale came a year after Vannin scrapped plans for an IPO. New York-based Fortress, a subsidiary of the SoftBank Group, acquired 100% of the equity in Vannin from existing shareholders, including majority owner Bramden Investments, a private equity vehicle funded entirely by DLA Group, a family office based in the Isle of Man. The value of the deal was confidential.

At the time of the deal, Runté called the acquisition a "logical next step and natural fit for our business," adding that "it will complement the breadth of our relationships and leadership in the space."

But several weeks later, Debtwire reported that the deal was prompted by U.K.-based Vannin's financial distress, noting that before turning to Fortress, the company spent much of the summer looking to private equity firms for capital to keep it afloat. When these efforts failed, the company put its entire portfolio up for sale, with an initial asking price of $200 million, according to Debtwire. Vannin had initially sought to go public at a value of £1bn ($1.29 billion), and it then lowered its valuation to £600 to £700 million ($776 to $996 million) before shelving the initial public offering.

Fortress had made previous investments in litigation finance, putting $100 million into a new investment entity operated by Australia-based IMF Bentham in 2017. The company also functions as a direct lender, and the Debtwire report said that it had previously loaned money to Vannin, with more financing to be unlocked in the event of a successful IPO. The failure of the IPO then led to a cash crunch that limited Vannin's ability to make new deals.

Vannin made its first U.S. hire in Washington, D.C., in January 2016, bringing aboard an international arbitration specialist from Freshfields Bruckhaus Deringer. It opened a New York office in August 2017 with three investment directors formerly of Arnold & Porter Kaye Scholer, Freshfields and Dentons. A year later, the company brought on former Bloomberg Law president Scott Mozarsky as regional managing director for North America.

Vannin launched in Germany in June 2018 with the hire of Theo Paeffgen, former CEO of FORIS AG, the first litigation funder to be established in that country.

Vannin has also seen exits in the U.K., notably Ania Farren, an international arbitration expert who left the partnership at Bryan Cave Leighton Paisner to become a managing director in August 2018.

Vannin's chief executive Richard Hextall and finance chief David Collins had agreed to step down at the completion of the deal, according to the Financial Times. Altogether, Vannin's website listed 35 professionals a week after the deal was announced. That figure is now down to 16. Several sources said the company briefly stripped the website of all names in October before restoring them.

Fortress itself has a group of approximately one dozen individuals in the U.S. who do work in legal finance, either through lending money to other finance operations, or by lending directly to other law firms collateralized against their work in progress, according to a source familiar with the company's operations.

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