Why are litigation investments often locked up for years?

Because the cash comes only when cases end, and cases end on courts' and opponents' timetables. Burford says 'most cases settle and pay proceeds in a relatively short period of time, and a minority of cases go on to adjudication, which takes longer.' Its concluded assets averaged 2.7 years weighted by realizations at September 30, 2026, but its active capital had been outstanding 3.6 years on average, and a fund must also invest its money before it can return it.

What lock-ups do litigation funds use?

Long, closed-end terms. AltStreet's Legalist review reports $1 million minimums and five-year lock-ups on its core litigation funds. Omni Bridgeway's funds are closed-end vehicles for non-retail investors with a US$1 million minimum on its adviser's Form ADV. LexShares entered harvest mode in August 2024 and is not accepting new investors; its existing investors wait for cases to resolve.

Can a fund interest or a case be sold?

Occasionally, at a price. Burford says it has 'in a small number of matters' made 'a secondary sale of all or a portion of an asset prior to its conclusion,' including part of its YPF Petersen entitlement through Colorado Investments Limited. AltStreet's Omni Bridgeway review describes its 2025 sale of most of its own co-investments to Fund 9, a continuation fund, with Ares buying 70%. Buyers cannot see privileged case materials, which limits pricing.

Is a listed funder more liquid?

The shares are, the assets are not. Burford's shares trade daily, so an investor can sell, but at whatever the market pays for a portfolio of illiquid cases. Burford's risk factors warn that if it had to sell assets quickly, 'we may realize significantly less than the value at which we have previously recorded' them.

What happens at the end of a fund's term?

Pending cases do not stop. Funds typically have extension options, can sell remaining interests or move them to a continuation vehicle, or distribute them over time as they resolve. Each option has costs: extensions prolong fees in some structures, and continuation sales raise pricing and conflict questions.

How should an investor plan for this?

Treat the commitment as unavailable for the fund's full life plus extensions, size it against other liquidity needs, and expect distributions to be lumpy. Model what happens if realizations arrive two years later than projected, and ask about secondary options and the manager's record of meeting projected distribution schedules.

Litigation Fund Liquidity

Litigation Finance & Legal Claims

Definition

Litigation fund liquidity is how readily an investor can get money out of a litigation investment. Closed-end litigation funds return capital only as cases realize, typically over years, and usually allow no redemptions; secondary sales are possible but uncommon. Burford's 2025 Form 10-K says 'the timing of realizations is difficult to forecast and is rarely in our control' and that 'it may be difficult or impossible to find willing buyers for these assets at prices we believe are representative of their underlying value or at all.'

Why it matters

Illiquidity is the price of litigation finance's independence from markets: the cash depends on court calendars and opponents' decisions, not on anyone's wish to sell. That makes lock-ups long and exits expensive. Secondary markets exist but are thin, partly because privilege keeps buyers from seeing what they are buying. Listed funders offer share liquidity but not asset liquidity. For an investor, the right question is not when the fund's term ends but when the cash is likely to come back, and what it would cost to leave early. Ask for projected distribution schedules by vintage, how actual distributions compared, and what secondary options the manager supports.

Common misconceptions

•A stated fund term is not the investment's life, because pending cases can force extensions or continuation sales.
•Listed funder shares are not liquid assets, because the share price reflects a portfolio that cannot be sold quickly at its marks.
•Secondary sales are not a reliable exit, because buyers are few and privilege limits what they can see.
•Short concluded-case durations do not mean short lock-ups, because a fund must first deploy capital and its longest cases set its life.
•Distributions are not regular income, because cash arrives when cases resolve, in uneven amounts.

Technical details

Worked example (illustrative): a fund's cash flows

Investor commits $1.0 million to a litigation fund.

Years 1 to 3: capital called as cases are funded, about $800,000 in total; little comes back.

Years 3 to 6: early settlements return about $500,000.

Years 6 to 9: longer cases resolve, returning about $900,000; the fund extends twice.

Total $1.4 million back on $800,000 called, 1.75x, but the investor waited about four years to see any cash and nine to see most of it.

Ways out, and their costs

Wait: lumpy distributions as cases resolve.

Sell the fund interest: few buyers, discounts, privilege limits diligence.

Continuation fund: pricing and conflict questions.

Listed funder shares: daily liquidity at a market price, not the assets' marks.

Single-case platforms: no exit until the case ends.

What AltStreet's reviews and filings show

Burford's 2025 10-K says 'it may be difficult or impossible to find willing buyers for these assets at prices we believe are representative of their underlying value or at all,' partly because buyers 'cannot perform full legal due diligence on an underlying matter due to the limitations imposed by applicable legal privileges'; timing of realizations 'is rarely in our control.'

Burford 10-Q (September 30, 2026): WAL of concluded assets 2.7 years (realization-weighted); active deployed capital outstanding 3.6 years on average.

AltStreet's Legalist review: $1 million minimum, five-year lock-ups. AltStreet's Omni Bridgeway review: US$1 million minimum; 2025 sale of co-investments to Fund 9 with Ares buying 70%.

AltStreet's LexShares review: harvest mode from August 2024; not accepting new investors.

Questions about liquidity

What is the fund's term and how many extensions are allowed?

What is the projected distribution schedule, and how did earlier vintages compare?

Can interests be transferred, and has the manager facilitated secondary sales?

What happens to cases pending at the end of the term?

How much of your liquidity can you commit for ten years?

How investors apply the term

Investors usually apply this term by tying the definition back to the controlling documents and then asking which cash flows, rights, restrictions, or valuation assumptions it changes. A useful review looks at the term alongside fees, leverage, liquidity, reporting frequency, and manager discretion rather than treating it as a standalone concept.

The practical diligence test is simple: identify who benefits if the assumption is wrong, who has control when conditions change, and what evidence the investor receives after closing. Terms that cannot be reconciled to documents, cash movements, and monitoring data should be treated as marketing shorthand until proven otherwise.

Frequently asked questions

Why are litigation investments often locked up for years?: Because the cash comes only when cases end, and cases end on courts' and opponents' timetables. Burford says 'most cases settle and pay proceeds in a relatively short period of time, and a minority of cases go on to adjudication, which takes longer.' Its concluded assets averaged 2.7 years weighted by realizations at September 30, 2026, but its active capital had been outstanding 3.6 years on average, and a fund must also invest its money before it can return it.
What lock-ups do litigation funds use?: Long, closed-end terms. AltStreet's Legalist review reports $1 million minimums and five-year lock-ups on its core litigation funds. Omni Bridgeway's funds are closed-end vehicles for non-retail investors with a US$1 million minimum on its adviser's Form ADV. LexShares entered harvest mode in August 2024 and is not accepting new investors; its existing investors wait for cases to resolve.
Can a fund interest or a case be sold?: Occasionally, at a price. Burford says it has 'in a small number of matters' made 'a secondary sale of all or a portion of an asset prior to its conclusion,' including part of its YPF Petersen entitlement through Colorado Investments Limited. AltStreet's Omni Bridgeway review describes its 2025 sale of most of its own co-investments to Fund 9, a continuation fund, with Ares buying 70%. Buyers cannot see privileged case materials, which limits pricing.
Is a listed funder more liquid?: The shares are, the assets are not. Burford's shares trade daily, so an investor can sell, but at whatever the market pays for a portfolio of illiquid cases. Burford's risk factors warn that if it had to sell assets quickly, 'we may realize significantly less than the value at which we have previously recorded' them.
What happens at the end of a fund's term?: Pending cases do not stop. Funds typically have extension options, can sell remaining interests or move them to a continuation vehicle, or distribute them over time as they resolve. Each option has costs: extensions prolong fees in some structures, and continuation sales raise pricing and conflict questions.
How should an investor plan for this?: Treat the commitment as unavailable for the fund's full life plus extensions, size it against other liquidity needs, and expect distributions to be lumpy. Model what happens if realizations arrive two years later than projected, and ask about secondary options and the manager's record of meeting projected distribution schedules.