Trends and Key Developments Impacting the Litigation Finance Market

Trends and Key Developments Impacting the Litigation Finance Market

How are inflation and rising rates impacting the litigation funding market? How can funders attract more institutional capital in today’s economic environment? What new products are emerging to disrupt the market? IMN’s 5th Annual Financing, Structuring, and Investing in Litigation Finance event kicked off with an opening panel on “The State of the Market: Where is the Litigation Finance Market Headed?” The panel consisted of Douglas Gruener, Partner at Levenfeld Pearlstein, Reid Zeising, CEO and Founder of Gain (formerly Cherokee Funding & Gain Servicing), William Weisman, Director of Commercial Litigation at Parabellum Capital, Charles Schmerler, Senior Managing Director and Head of Litigation Finance at Pretium Partners, and David Gallagher, Co-Head of Litigation Investing at the D.E. Shaw Group. The panel was moderated by Andrew Langhoff, Founder and Principal of Red Bridges Advisors. There is a lot of experimentation happening in the Litigation Finance market, whether that be single-case financing, portfolio financing, secondaries investment, defense-side funding and other strategies. Regardless of one’s position in the market, it is evident that the Litigation Finance sector continues to grow, both in terms of demand for the industry’s products and in terms of adoption within the broader Legal industry. Interestingly, David Gallagher of D.E. Shaw noted that while both funder AUM and new commitments by funders continue to rise, the rate at which AUM is rising is slowing down while the rate at which new commitments are rising is speeding up. So, there are no longer ‘too many dollars chasing too few deals,’ as was the case for the past several years. William Weisman of Parabellum corroborated that narrative by noting that his phone and the phones of many other funders continue to ring with new deals. And while the majority of cases Parabellum sees are single case funding, there is increasingly demand for portfolio funding. Weisman also noted that there is opportunity in the smaller end of the market, which larger funders can’t focus on due to opportunity cost or LTV reasons. Doug Gruener added that average deal size has indeed trended upwards over the past few years, primarily due to a recent influx in mass tort investments. Nine-figure deals are not uncommon in today’s funding environment. Also, the cost of legal services goes up every year, especially in an inflationary environment, which of course necessitates larger and larger case investments. Charles Schmerler of Pretium noted that pricing is up, but that is relative to the previously muted pricing.  Funders are now able to underwrite in ways that are more sensible, in terms of what investors are looking for. Moderator Andrew Langhoff then asked if demand is up, AUM is up, pricing is up, why are funders having issues raising capital? David Gallagher responded that just because a handful of market participants are having trouble, that doesn’t imply systemic risk. In fact, it underlines the sustainability of the industry, given that specific operators can have problems and the rest of the industry still grows. Charles Schmerler added that in any economy, there will be idiosyncratic distress. This will impact the market. Things shake out, and for funders to succeed, they need to understand what sophisticated investors in the market are looking for. There can be a disconnect there—funders need to understand investors’ needs and exit strategies. The question then turned to duration risk—is this what is causing hesitation amongst LPs? Doug Gruener stated firmly that he’s found that duration risk is not the issue, rather it’s the broader state of the market that is causing some investors to sit on the sidelines, perhaps due to a ‘risk-off’ approach. Another factor that doesn’t help is the age of the industry—this is the 5th annual IMN event, after all—so that FOMO that existed in year one simply doesn’t exist anymore. Reid Zeising of Gain did stress duration risk as an issue, however. “Lesson 101 in Finance,” he reminded, is that “asset and liability should match duration. If you extend your liability beyond your asset, that is the number one way to get in trouble.” Other parts of the discussion centered around regulation (“The Chamber of Commerce is the shill of the Insurance Industry,” according to Reid Zeising), secondaries (“There were a large number of investments made five to seven years ago, so the opportunity is ripe both on the demand side and supply side,” says Doug Gruener), and disclosure (“In the space of disclosure, if both sides could have a reasonable discussion, it might work. But we’re not in a space where both sides can have that discussion,” claims Charles Schmerler). Overall, the first panel at IMN covered a broad range of topics impacting the Litigation Finance sector in 2023. It was a robust and well-rounded discussion, and set the table for subsequent panels which dove deeper into the topics touched upon here.   *Editor’s Note: An earlier version of this article incorrectly stated that David Gallagher noted that new commitments by funders are now falling. Mr. Gallagher in fact stated they are rising. We regret the error. 
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Omni Bridgeway Posts Strong FY25 After ‘Transformational’ Year

By John Freund |

Omni Bridgeway has reported a step-change year, pairing robust investment performance with a balance sheet reset that positions the platform for its next growth phase. The ASX-listed funder highlighted headline income of $651.3 million, a $3.6 billion portfolio (up 29% year over year), and A$5.2 billion in assets under management. Returns were anchored by a 2.5x MOIC across 60 full and partial completions, while operating discipline showed through with a 6.2% reduction in cash opex. Management framed FY25 as both a consolidation of strategy and a proof point for the firm’s fair value marks.

An article in PR Newswire notes the year also brought 52 new investments totaling A$517 million in commitments and A$525.9 million added to fair value. Crucially, Omni executed its Fund 9 transaction with Ares—fully deleveraging and “significantly derisking” the balance sheet—while also validating its model with third-party institutional capital. CEO Raymond van Hulst called FY25 “a positive year with excellent investment returns and a transformative transaction,” adding that the platform is well placed for continued growth.

For a sector navigating evolving regulation and disclosure debates, the numbers matter—but so does capital formation. Omni’s ability to recycle capital, expand AUM and originate across jurisdictions reinforces the durability of legal assets as an alternative class.

Apex Litigation Finance Appoints Gabriel Olearnik as Head of Legal

By John Freund |

Apex Litigation Finance has strengthened its leadership team with the appointment of Gabriel Olearnik, a highly experienced litigation funding professional with a global track record in high-value dispute resolution and complex commercial matters.

Over the past five years, Gabriel has originated and reviewed more than 451 litigation funding cases worldwide with an aggregate value exceeding $116 billion, closing deals worth over $700 million. His recent work includes the successful settlement of a high-profile BIT matter as well as executive employment claims in the UK.

Gabriel’s career spans senior roles in UK, US and European litigation funders, where he was instrumental in structuring high-value transactions, securing strategic court orders and conducting multi-jurisdictional investigations. In 2023, he closed a £268 million litigation funding deal in just three weeks, underscoring his ability to deliver results under tight timelines.

Recognised by Lexology as one of only 66 lawyers worldwide to receive the Thought Leaders in Third Party Funding accolade, Gabriel has been involved in matters that have attracted daily media coverage and required innovative dispute strategies. His experience extends to training legal teams, advising on politically sensitive disputes, and executing complex enforcement actions.

“Gabriel brings exceptional global experience, deep sector knowledge, and a proven ability to deliver in high-stakes environments,” said Maurice Power, CEO of Apex Litigation Finance. “His appointment further enhances Apex’s market position and it’s ability to originate, evaluate and fund complex commercial claims for our clients.”

“I am delighted to join Maurice and the team at Apex,” said Gabriel. “Apex’s strong financial backing and their speed of execution make this a natural alignment. I look forward to building on the strong foundation set out by my predecessor, Stephen Allinson, and contributing to the future success of the business.”

Gabriel’s appointment reflects Apex’s ongoing growth in funding small to mid-sized UK commercial disputes and builds on the company’s commitment to delivering fast, fair, and competitive non-recourse litigation funding solutions to claimant’s who may be prohibited from pursuing meritorious cases due to cost and/or financial risk.

Cartiga’s $540M SPAC with Alchemy

By John Freund |

Cartiga, a long-standing player in consumer and attorney funding, is heading to the public markets. The company agreed to combine with Alchemy Investments Acquisition Corp. 1 in a transaction pegged at $540 million in equity consideration, positioning the platform to scale its data-driven approach to underwriting and portfolio management. Management frames the move as about reach and efficiency: tapping a listed currency, broadening investor access to the asset class, and accelerating inorganic growth.

An article in MarketWatch reports that the proposed business combination would take Cartiga public via Alchemy’s SPAC, with the parties emphasizing how a listing could support growth initiatives and acquisitions. The piece notes the strategic rationale—public-market transparency and capital flexibility—as the platform seeks to deepen its footprint in funding for legal claims and law firms.

While final timing remains subject to customary steps (including the shareholder vote and regulatory filings), the announcement marks one of the most significant U.S. litigation-finance capital-markets events of the year.

Cartiga’s trajectory reflects a broader institutionalization of legal finance: more data, more discipline, and more diversified funding channels. The company’s model—providing non-recourse advances to plaintiffs and working capital to law firms—relies on proprietary analytics and scale to manage risk and returns across cycles. A public listing, if completed, would put Cartiga alongside other listed peers globally and provide investors with another pure-play exposure to the asset class’s uncorrelated return profile.