Weighted-average life is the average time to cash across a pool, weighting each position's time by the dollars it returns. It summarizes how long a book keeps capital out, and it is read alongside the tail, not instead of it.
For a portfolio of legal assets, weighted-average life guides planning, facility terms and fund life. It is computed from the distribution of resolution times and the amounts expected at each point.
A figure built on the average can be badly wrong at the tail. Reserves, facility headroom and refinancing risk are governed by the matters that run long, so the 90th percentile and excess time at risk are reported with it.
Weighted-average life is not a prediction for any one matter. It is a property of a pool that changes as matters resolve and new ones are added.
Working a file that turns on this term?
Working through a diligence process?
Institutional partners evaluating a position against this platform's outcome and duration models are welcome to reach out directly.