Litigation Finance for Professional and Institutional Investors
An alternative asset class advised and arranged by Audley Capital. For professional, institutional and sophisticated investors only. Returns are targets, not guarantees, and capital is at risk.
Important risk warning.
Investing in litigation finance is high-risk. Any returns are targets, not guarantees, and you may lose all of the capital you invest. Past performance is not a guide to future results. Litigation finance is illiquid and is generally not covered by the Financial Services Compensation Scheme (FSCS). This page is intended only for professional, institutional and sophisticated investors. It is general information, not a personal recommendation, a financial promotion approved by an authorised person, or an offer to invest. Any decision should be based on independent advice and your own due diligence. See our risk warning and important information.
Why investors consider litigation finance
Litigation finance is considered by investors as an alternative asset class that has historically shown low correlation to public markets. That correlation profile is a historical observation, not a promise. Every reference to returns on this page is a target, not a guarantee — and your capital is at risk. Investors typically use it to diversify away from equities and bonds and to gain exposure to outcomes that depend on the legal merits of specific cases.
For more market context, see our overview of litigation finance and our note on returns for investors.
An alternative asset class
Returns on litigation finance depend on individual case outcomes, not on equity or bond markets. This is a historical observation, not a promise of future performance.
Historically low correlation
Because outcomes are driven by legal merits, litigation finance has historically shown low correlation to public markets. Past performance is not a guide to future results.
Portfolio diversification
Litigation finance can sit alongside other alternative allocations to diversify a portfolio. Any target returns are non-guaranteed and your capital is at risk.
Non-recourse case structures
Individual cases are typically funded on a non-recourse basis to the claimant. That protects the claimant — it does not remove risk to the investor's capital.
How litigation finance generates returns
Returns come from a share of the proceeds if a funded case succeeds. The economics follow a recovery waterfall:
- 1Deployed capital is repaid first — the funder recovers the money actually spent on legal costs and disbursements.
- 2The funder's agreed return is then paid — typically expressed as a multiple of deployed capital or a share of net recoveries.
- 3The remainder goes to the claimant. No return is due if the case fails.
Returns therefore depend entirely on case outcomes, which are uncertain. Some or all of the capital committed to a case — or across a portfolio of cases — can be lost. See portfolio securitisation for how these cashflows are sometimes packaged at portfolio level.
The risks you need to understand
These risks are not softened. You should read them in full before considering any litigation finance opportunity.
Key risk factors
- Case outcome uncertainty and the binary nature of litigation
- Duration risk and delays that can extend investment horizons
- Counterparty and collectability risk — winning is not the same as being paid
- Regulatory and legal environment changes affecting funding and enforcement
- Illiquidity — capital may be committed for years with no exit
- Total loss of capital — you may lose all of the money you invest
How risk is managed — not removed
Risk is managed, not eliminated. The tools typically used are:
Rigorous due diligence
Each case is assessed on legal merits, quantum, defendant solvency and enforceability before any capital is committed.
Diversification
Portfolio structures spread exposure across case types and jurisdictions to reduce the impact of any single loss.
Insurance, where appropriate
After-the-Event or capital protection insurance can address adverse-costs and downside risks at the case level.
Insurance reduces but does not remove risk. No structure — insured, portfolio-diversified or otherwise — guarantees a return, and no structure prevents the loss of some or all of the capital you invest.
Who Audley Capital works with
We work with investors that meet the definitions of professional, institutional or sophisticated investor, including:
Indicative minimum commitment figures depend on the specific opportunity and are shared only after you confirm you are a professional, institutional or sophisticated investor in the section below.
Audley Capital's role
Audley Capital is an adviser and arranger. We are not a funder and we are not a discretionary manager. We introduce and help structure litigation finance opportunities between our network of funders, capital partners and qualifying investors.
We do not provide investment, legal or tax advice, and we do not guarantee returns or outcomes. Any decision to commit capital should be based on independent advice and your own due diligence.
Register your investor interest
No obligation. We typically respond within 24 hours.
Investor confirmation required
Before we share any indicative return figures, minimum commitments or specific opportunities, please confirm your investor status.
Frequently asked questions
Is litigation finance regulated?
Litigation funding itself is generally not a regulated activity under the Financial Services and Markets Act 2000 (FSMA). Funders may voluntarily follow codes of conduct, but this is not the same as investor protection under FCA rules or the FSCS.
What returns can I expect?
Any return figures shown by funders or in market commentary are targets only. They are not guarantees, not forecasts, and not a reliable indicator of what any individual investor will receive. Your capital is at risk and you may lose all of it.
How liquid is the investment?
Litigation finance is illiquid. Capital may be committed for several years, with no established secondary market. You should not invest capital you may need to access at short notice.
How is my capital protected?
The non-recourse feature of litigation funding protects the claimant if a case is lost — it does not protect the investor. After-the-Event or capital protection insurance can manage certain downside risks at the case level, but no structure removes risk from the investor's capital.
What is the minimum investment?
Any minimum commitment figures are indicative only and depend on the specific opportunity. Indicative ranges are shared after you have confirmed you are a professional, institutional or sophisticated investor.
Register your investor interest
For professional, institutional and sophisticated investors only. Capital is at risk.
