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A Proven Asset Class Limited
by Outdated Structures
A Proven Asset Class Limited
by Outdated Structures
Litigation finance represents one of the most attractive non-correlated alternative assets available today. Portfolio returns consistently deliver 15-35% IRR with minimal correlation to traditional equity or fixed-income markets, providing genuine portfolio diversification during economic volatility.
The underlying asset—meritorious legal claims—demonstrates remarkable stability. Win rates for funded cases exceed 70% in commercial litigation, and settlement values continue appreciating as corporations seek to avoid costly trial exposure.
Yet this stable, high-yield asset class is trapped within a centralized delivery mechanism that is simultaneously vulnerable to regulatory disruption, constrained by capital scarcity, and structurally incapable of serving the broader market.
The imperative is clear: the market requires fundamental restructuring to align the industry's operational model with both regulatory realities and the massive unmet demand for litigation capital. Investors and innovators who recognize this inflection point will capture the next wave of growth in legal finance.
The Outdated Structures Limiting Industry Success
The Outdated Structures Limiting Industry Success
Capital Inefficiency Crisis
Capital Inefficiency Crisis
The Problem: Demand for legal financing from law firms and claimants substantially exceeds the capital available from commercial funders, creating a massive supply-demand imbalance.
Market Impact: A $20 Billion market remains critically underbanked, leaving countless meritorious claims unfunded. High-quality cases with strong legal merit are rejected not due to lack of viability, but simply because funding sources are exhausted.
This capital constraint artificially limits market growth and prevents qualified plaintiffs from pursuing legitimate claims.
Existential Regulatory Risk
Existential Regulatory Risk
The Problem: TPLF operates in an inherently opaque environment, relying heavily on undisclosed third-party interests, complex ownership structures, and offshore shell companies that obscure true financial stakeholders.
Regulatory Threat: Proposed federal legislation, including the Litigation Transparency Act of 2025, mandates comprehensive disclosure of funding sources and beneficial ownership. These transparency requirements threaten traditional centralized TPLF models with structural compliance failure.
Without fundamental restructuring, incumbent funders face regulatory obsolescence.
Exclusionary Access Barrier
Exclusionary Access Barrier
The Problem: Traditional litigation funders exclusively target massive cases, typically requiring claims exceeding $10 Million in potential recovery and minimum investments above $2 Million per case.
Justice Gap: This high barrier transforms justice into an elite asset class, systematically denying funding to mass tort victims, small business commercial disputes, and mid-sized employment claims—regardless of legal merit.
Thousands of viable cases with strong probability of success remain unfunded, creating a two-tier justice system where only the largest disputes receive financial backing.
...and yet Industry Growth is Strong
...and yet Industry Growth is Strong
Global Litigation Assets Under Management (US$ Billions)
Growing Momentum: Total AUM
Growing Momentum: Total AUM
The market for litigation funding has expanded significantly, with Assets Under Management (AUM) growing from $9.5 billion in 2019 to ~$21.2 billion in 2025.
This upward trend reflects strongly towards the increasing demand for litigation finance solutions. Furthermore, the sector's attractive, non-correlated returns make this a strong asset class for investors.
Unlocking $65B In Litigation Funding By 2035
Unlocking $65B In Litigation Funding By 2035
To learn more about or get involved with our LexYield Litigation Funding Platform, please contact us.
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