RIAs Explore Litigation Finance via SEI Access

Why It Matters

Litigation finance provides a non‑correlated return source for wealth managers, while emerging regulations address transparency concerns that have limited broader RIA participation.

Key Takeaways

• Global litigation‑funding market projected to surpass $50 B by 2036
• Pravati loans senior‑secured to law firms at 19‑27% annualized rates
• Burford’s historic IRR ~26% with 78% cases settling pre‑trial
• NY law mandates disclosure, reducing opacity for advisors

Pulse Analysis

The addition of litigation‑finance products to SEI Access reflects a broader shift toward alternative assets that decouple performance from traditional market cycles. With interest rates on senior‑secured loans ranging from 19% to 27% and reported fund returns of 20%‑40%, advisors see a compelling yield premium. Yet the risk profile differs sharply from conventional private‑credit; outcomes hinge on legal judgments, case settlements, and regulatory environments, making thorough due‑diligence essential.

RIAs remain divided on embracing the class. Large firms like Mercer Advisors label it "highly speculative," citing unpredictable returns and potential conflicts of interest. Conversely, platforms such as CAIS and iCapital are watching SEI’s move, recognizing client demand for diversification that can thrive even in downturns. The market’s growth—projected to more than double by 2036—suggests a maturing ecosystem, but adoption will likely be driven by education and the availability of compliance‑ready solutions that streamline underwriting and reporting.

Regulatory developments are poised to tip the balance. New York’s Consumer Litigation Funding Act, effective after its December 2025 enactment, forces funders to disclose key terms and bans interference with litigation strategy. This transparency framework addresses one of the chief objections from wealth managers and could serve as a template for other states. As the legal‑finance niche gains clarity, advisors may increasingly allocate a modest portion of ultra‑high‑net‑worth portfolios, leveraging the asset’s low correlation to economic cycles while managing the inherent case‑level volatility.