Hedge Funds Snap Up Fire Claims As Legal Push Falters

Hedge funds are buying subrogation claims tied to LA fires as political efforts to curb the trade stall, with prices ranging from 3 to 60 cents on the dollar.

Nearly two years after the Eaton and Palisades fires caused an estimated $40 billion in insured damage, the question of who will ultimately pay remains unresolved. This uncertainty has led to a surge in hedge fund activity, with investors snapping up subrogation claims at steep discounts. Prices for these claims now range from as low as 3 cents on the dollar to around 60 cents. Bradley Max of Cherokee Acquisition notes that the market has shifted from a 'chill' to a 'plenty of appetite' for both buyers and sellers. Eaton claims trade at 55-60 cents, while Palisades claims are valued at just 3-5 cents. Recent purchases of Palisades-related claims have been made for under a dime on the dollar, with investors targeting returns in the low-to-mid teens.