Boris Ziser, partner and co-head of Schulte Roth and Zabel’s Finance Group, joined Nasdaq’s TradeTalks to discuss the growing demand for alternative investment strategies, including litigation finance. He highlighted the unique opportunities in this space, noting its potential for diversification and strong returns in volatile markets.

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Schulte partner Boris Ziser was a featured guest on Bloomberg’s Wall Street Week, where he discussed the growing intersection between private equity and the legal industry. Boris explored how outside investment — already seen in litigation finance — is poised to reshape Big Law more broadly.

Pointing to the expanding need for third-party funding, Boris described how litigation is often too expensive and time-consuming for both individuals and law firms. Determining whether a case is worth pursuing demands a significant upfront investment, creating a financial strain — particularly for firms managing multiple contingency cases at once. “It’s the need for capital, given how expensive it is to litigate, that has created this need for outside investment,” he explained.

Boris also spoke to recent regulatory changes in states like Arizona and Utah, which have introduced Alternative Business Structures (ABS) — a model established in the UK but relatively new to the US legal landscape. These structures allow law firms to incorporate non-lawyer ownership and investment, provided they obtain a specialized license through a rigorous vetting process overseen by the state Supreme Court. Boris emphasized the importance of separating legal expertise from operational strategy, noting the value non-lawyer professionals can bring to the business side of law firms, “There is a real difference between the practice of law and the business of law and having somebody who’s not a lawyer, who has the financial acumen to help a law firm be more efficient, more profitable, function more smoothly, take advantage of the technological advancements, whether it’s AI or any other technological advancements, only inures to the benefit of the clients,” he stated.

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Schulte Roth & Zabel partners Peter Greene, Dan Hunter, Eileen Overbaugh and David Lifshitz authored the introduction to Hedge Funds in the Chambers USA 2025 Guide.

Their article, “Portable Alpha Strategies: Legal and Structural Considerations” explores how these strategies have gained traction as investors seek to boost returns by combining alpha (excess returns from active management) with beta (market returns) in a single investment structure. The authors discussed how portable alpha structures presents a series of legal, structural and fiduciary challenges explaining that managers must carefully choose the right structure to balance efficiency, cost and risk — particularly contagion risk, where volatility in beta can affect alpha performance.

The article also highlights the rise of Separately Managed Accounts (SMAs), which have evolved into mainstream tools for fundraising and co-investments. Once considered secondary to commingled funds, SMAs now play a central role across strategies and investor types, offering customization, better alignment and direct ownership of assets.

Portable Alpha key considerations:

Structuring matters

• Managed accounts: Low legal risk, but complex to replicate.

• Class structures: Cost-efficient, but highest contagion risk.

• Feeder funds: Balanced risk/cost approach with cash buffers.

Mitigating fiduciary risk involves

• Capping strategy size

• Clear margin protocols

• Fee sharing and transparency

The rise of SMAs:

• Direct ownership: SMAs give investors control over assets, unlike pooled funds.

• Mainstream adoption: Used by managers of all sizes, including emerging and multi-strategy firms.

• Broader use: Now common for launch capital, co-investments, and even less liquid strategies.

• Improved terms: Liquidity, expense sharing, and financing terms are better aligned with commingled funds.

• Institutional-grade structure: SMAs are now seen as flexible, efficient, and transparent — reshaping how managers and investors structure relationships.

Looking towards the future, the authors predict that as investor demand grows, both portable alpha structures and SMAs will reshape the asset management landscape.

Read the article.