As per the current market research conducted by CMI Team, the US Litigation Funding Investment Market size is expected to record a CAGR of 8.9% from 2023 to 2032. In 2023, the market size is projected to reach a valuation of USD 4.5 Billion. By 2032, the valuation is anticipated to reach USD 9.7 Billion.
US Litigation Funding Investment Market: Growth Factors and Dynamics
- Global Economic Trends and Investor Appetite: The dynamics of the US litigation funding investment market are influenced by global economic trends and investor appetite for alternative investments. As traditional investment markets face uncertainties, investors are increasingly exploring non-traditional avenues like litigation funding, contributing to the market’s growth as part of a diversified investment strategy.
- Strategic Partnerships and Collaboration: The US litigation funding market is witnessing growth through strategic collaborations between litigation finance firms and law firms. Such partnerships allow for a more seamless integration of funding into legal strategies, creating synergies that benefit both parties and contribute to the overall expansion of the market.
- Increasing Demand for Litigation Funding: The US litigation funding investment market is experiencing growth due to a rising demand for litigation financing. As legal costs continue to escalate, businesses and individuals seek external funding to pursue legal actions without the burden of upfront expenses.
- Expanding Legal Market Opportunities: The dynamics of the US legal landscape present opportunities for litigation funding. The market benefits from a growing number of complex legal cases, including class actions and commercial disputes, which attract investors looking to capitalize on potential settlements.
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US Litigation Funding Investment Market: Partnership and Acquisitions
- In 2022, LexShares has achieved a significant milestone by securing a $100 million fund, named LMFII, for litigation finance. This success comes after a notable event in 2021 when the company received a majority investment from Brockhurst Capital Partners, a Chicago-based private equity firm specializing in specialty finance.
- In 2022, Legalist is generating excitement in the tech startup sphere by exploring the potential of private credit. Similar to iconic firms like D.E. Shaw or Renaissance Technologies, Legalist’s convergence of market ideas, bold strategies, and technology positions it as a notable player in the evolving landscape of legal and financial innovation.
- In 2023, Burford Capital has expanded its European presence, driven by increased client demand for services like corporate monetization and law firm portfolio financing. The surge is propelled by a growing need for legal finance in Europe, spurred by legislative changes, leading to Burford’s establishment in London, Frankfurt, Zug, Paris, Rome, and Stockholm.
US Litigation Funding Investment Market: COVID-19 Analysis
The COVID-19 pandemic has had a significant impact on the US Litigation Funding Investment Market, with the industry experiencing both positive and negative effects. Here are some of the key impacts:
- Economic Uncertainty and Delayed Legal Proceedings: The economic uncertainty caused by the pandemic led to a slowdown in legal proceedings, impacting the volume and pace of potential legal cases available for funding. Court closures and delays in case resolutions created challenges for litigation funders.
- Increased Risk Perception: The heightened risk environment during the pandemic, coupled with the unpredictability of legal outcomes, made investors more cautious. Litigation funders faced increased scrutiny in assessing the risks associated with potential cases, leading to a temporary decline in investment activities.
- Shift in Priorities and Budget Constraints: Both businesses and individuals facing financial challenges during the pandemic shifted their priorities, and legal expenses often took a back seat. Budget constraints led to a decrease in demand for litigation funding as potential litigants reassessed their ability to pursue legal actions.
- Resurgence of Legal Cases: As economies recover and legal processes resume, there is a resurgence of legal cases, creating a renewed pool of opportunities for litigation funding. The backlog of delayed cases and new legal challenges contribute to an increased supply of cases available for funding.
- Adoption of Technology for Due Diligence: Post-COVID, litigation funders are increasingly adopting advanced technologies for efficient and thorough due diligence. Technology streamlines case evaluations, reduces operational costs, and enhances the accuracy of risk assessments, thereby attracting investors back to the market.
List of the prominent players in the US Litigation Funding Investment Market:
- Burford Capital
- Gerchen Keller Capital LLC
- Bentham IMF
- Omni Bridgeway
- Longford Capital Management
- Calunius Capital LLP
- Therium Capital Management
- Lake Whillans Capital Partners
- Parabellum Capital LLC
- Juridica Investments Limited
- IM Litigation Funding
- Legis Finance
- Curiam Capital LLC
- Redress Solutions
- Augusta Ventures Ltd
- Others
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