RIAs explore litigation finance via SEI Access

Alternative investment platforms are adding litigation finance opportunities for financial advisors, but many RIAs remain cautious about allocating client capital to a strategy whose returns hinge on courtroom outcomes rather than market performance.

SEI announced earlier this year that it expanded its alternatives marketplace, SEI Access, to include a litigation finance offering from Pravati Capital, an Arizona-based firm that’s funded more than $248 million to law firms and litigants since its founding in 2013. The global litigation funding investment market was valued at more than $20 billion in 2025 and is projected to grow to more than $50 billion by 2036, according to a report from consulting firm Research Nester.

“Oftentimes litigation finance for the United States isn’t nearly as adopted as it is outside the United States, in Europe specifically, and historically it has been institutional in terms of who would be allocating to it,” Pravati Capital managing director Kris Kjolberg tells InvestmentNews. “But now advisors are looking at asset classes like litigation finance, which leads us to platforms like SEI’s Access, like CAIS, like iCapital. They provide compliance workflow, due diligence, and operational controls that wealth managers, RIAs really require.”

Litigation financing remains a niche corner under the broader private credit asset class. “Advisor demand is real, but the category is education driven,” says Kjolberg. Pravati Capital primarily makes senior‑secured loans to middle‑market law firms, using portfolios of legal claims as collateral instead of financing individual cases. Loans typically originate at annualized interest rates between 19 and 27 percent, with an average investment duration of roughly two to two-and-a-half years, according to company materials.

“It’s an interesting alternative class, because the returns could be pretty high. From what I know, returns on successful funds are 20 to 40 percent,” says attorney Corey Kupfer, whose Kupfer Law firm specializes in M&A for RIAs. “They’re totally unrelated to economic conditions. In fact, sometimes when there are bad economic conditions, there’s more litigation.”

Public disclosures from Burford Capital, the largest litigation financing firm in the US, show the economics driving litigation finance. Across concluded investments, the firm reports a roughly  26 percent internal rate of return (IRR) and 83 percent return on invested capital. Most cases − roughly 78 percent − settle before trial, generating around 22 percent IRR, while cases that proceed to trial and win can produce returns exceeding 200 percent on invested capital. According to Burford’s latest investor presentation, approximately 8 percent of funded cases lose at trial, resulting in an average negative 87 percent return on invested capital.

“Because of the nature of the risk level, this is less applicable for firms that are doing massive affluent type clients as opposed to more ultra-high worth,” adds Kupfer. “Obviously, this is something you see in the family office model, the multi-family office model much more often.”

Count Mercer Advisors among the large national RIA firms not buying the return-to-risk profile of litigation financing. The mega-RIA manages nearly $100 billion in client assets, including its Regis Group division covering ultra-high-net-worth clients with $25 million or more in investible assets. Litigation financing was described as a “highly speculative investment” by advisor David Krakauer, VP of portfolio management at Mercer Advisors.

“There’s a high risk of loss, very unpredictable outcomes. And then when we think about who’s bringing the lawsuits and who’s actually running the proceedings, there’s actually a high potential for conflicts of interest as well when we think about the outcomes and who’s influencing the outcomes of some of these cases,” says Krakauer.

“With something like litigation finance, the outcomes are so widespread. It’s very hard to peg this asset class as something that’s going to deliver X returns for our clients over a certain period of time,” he adds.

Current broader market developments could affect demand for litigation finance. A U.S. Supreme Court decision in February to strike down many of President Trump’s tariffs imposed under the International Emergency Economic Powers Act has spurred a wave of litigation seeking refunds to recover tariff payments totaling over $130 billion in the 10 months they were in effect.

The Wall Street Journal reported in March that more than 2,000 lawsuits have been filed by companies seeking tariff refunds, including well-known names like FedEx, Costco Wholesale, Goodyear Tire & Rubber, and Barnes & Noble Purchasing.

“Companies that paid tariffs are now pursuing refund litigation. The analysts that I read estimated $130 to $175 billion in refund claims, which is very large,” says Kjolberg. “Large-scale commercial disputes illustrate why advisors are seeking exposures that are driven by legal processes and not economic cycles.”

Pravati Capital mainly finances contingency-fee personal-injury law firms, and to a lesser extent backs mass-tort, commercial, intellectual property, and whistleblower cases. Pravati Capital has participated in government litigation, funding a law firm that represented individuals in the Camp Lejeune toxic‑water cases stemming from water contamination at the North Carolina Marine Corps base between the 1950s and 1980s. Settlements and awards since 2023 have totaled hundreds of millions of dollars.

New York has taken the lead on regulating litigation finance, passing one of the first substantive state laws aimed at increasing transparency and consumer protections in third‑party funding arrangements. The New York Consumer Litigation Funding Act, signed by Governor Kathy Hochul in December 2025, requires funders to disclose key terms of their financing agreements to plaintiffs and courts and prohibits funders from interfering with litigation strategy.

“New York has moved litigation financing from the shadows to a supervised, disclosure‑heavy regime, while empowering courts to probe funding when it bears on motive or misconduct,” wrote Maryan Alexander, partner at New York-based law firm Wilson Elser. “Stakeholders should prepare for regulatory compliance and more nuanced discovery practice as these changes take hold.”

SEI Access reports having over 250 wealth management firms using its alternatives platform, which is distinguished in its litigation finance offering compared to competing alts marketplaces like CAIS and iCapital that have not made any announcements around litigation finance offers. New York’s legislation to bring transparency to litigation financing is a step toward filling the transparency gap for RIAs currently avoiding the asset class.

“There’s so much non-transparency and expertise that’s involved in this, it makes it highly difficult to say [litigation financing] is a good, investable asset class for our clients,” says Krakauer. “If we did hear demand for it, I think the question would be, how do we put a valuation on that? How do we know if the price we’re getting is a good price or a bad price − if we’re investing into that space, what’s the yield, or what’s the multiple we should be requiring to take that risk?”