Can an investor have to provide more capital after the initial investment?

In a closed-end drawdown fund, yes, up to the amount committed. The manager calls capital as cases need it, and the investor must pay each call within the notice period. Investors in listed funders, such as Burford shares, cannot be called; the company funds its own commitments. Investors in single-case vehicles usually pay up front, but should check whether the vehicle can ask for more.

What are a funder's undrawn commitments to cases?

Amounts it has agreed to fund but not yet paid. Burford reported $1,264.4 million of definitive and $627.4 million of discretionary undrawn commitments on its capital provision assets, plus $47.0 million of definitive legal risk commitments, at September 30, 2026. Definitive commitments are those where failing to fund 'would typically result in adverse contractual consequences (such as a dilution in our returns or the loss of our deployed capital in a case).'

What happens if a funder does not meet a commitment?

The agreement decides, and it usually costs the funder. Burford names dilution of returns or loss of deployed capital as typical consequences. For the client, a funder that stops paying can leave a case without money mid-stream, which is why clients and their lawyers care about a funder's liquidity and why agreements set out what happens on termination.

What happens if a fund investor does not meet a capital call?

The fund documents set the remedies, which in private funds commonly include interest on the late amount, suspension of distributions, forced sale of the interest at a discount or forfeiture of part of it. See the capital call default page for how these work. Ask for the default provisions before committing.

How do funds plan for undrawn commitments?

By matching commitments to available capital. Funds can commit more to cases than they have called, expecting some commitments never to be drawn. AltStreet's Omni Bridgeway review describes Fund 6 as EUR 150 million 'plus a 25% over-commitment.' Burford reports liquidity alongside its undrawn commitments; AltStreet's Burford review cites liquidity of $621 million for FY2025.

Do undrawn commitments affect returns?

Yes, in both directions. Undrawn amounts are not earning a return, so an investor's committed but uncalled capital sits in other assets until called. Calls that come later than expected stretch the fund's life. And on cases, further funding can raise the funder's deployed cost while the return formula, if it is a multiple of deployed capital, grows with it, as Burford's 10-K notes.

Undrawn Commitments

Litigation Finance & Legal Claims

Definition

Undrawn commitments are capital that has been promised but not yet paid. In litigation finance they exist at two levels: a funder's undrawn commitments to cases, which it must or may fund as the cases proceed, and an investor's uncalled commitment to a closed-end fund, which the manager can call as the fund needs capital. Burford reports undrawn commitments split into definitive and discretionary categories.

Why it matters

Undrawn commitments are where litigation finance's future cash needs sit. For a fund investor they are a liability: money that can be called at short notice, for years, with penalties for default. For a funder they are a promise that clients rely on, backed by liquidity that must hold up through losses. Before committing to a fund, size the uncalled amount against your own liquidity over the fund's life. Then ask the manager how its definitive commitments to cases compare with its uncalled capital and cash.

Common misconceptions

•An investor's commitment is not paid on day one, because drawdown funds call capital over years, and the uncalled part remains a binding obligation.
•Listed funder shares carry no capital calls, because the company funds its own commitments from its balance sheet and borrowing.
•Undrawn commitments are not all binding, because discretionary commitments can be declined after further underwriting.
•Over-commitment is not a mistake, because funds expect some commitments never to be drawn, but it relies on that expectation holding.
•A default on a capital call is not a small matter, because fund documents commonly allow forfeiture or a forced discounted sale of the interest.

Technical details

Worked example (illustrative): an investor's capital calls

Commitment to a litigation fund: $1,000,000.

Year 1: 25% called ($250,000); year 2: 20% ($200,000); year 3: 15% ($150,000).

Uncalled after three years: $400,000, still payable on notice.

If the fund over-commits by 25% to cases and most commitments are drawn, the remaining calls can come sooner and larger.

Distributions from early wins may arrive while calls continue, so net cash flow can stay negative for years (the J-curve).

Two levels of undrawn commitment

Investor to fund: uncalled commitment, called by the manager, enforced by the fund documents' default provisions.

Funder to case: undrawn funding commitment, drawn as the case incurs costs, governed by the funding agreement.

Definitive vs discretionary: whether the funder must pay or may decline.

Liquidity: cash, uncalled capital and borrowing available to meet definitive commitments.

What AltStreet's reviews and filings show

Burford 10-Q (September 30, 2026): undrawn $1,264.4 million definitive, $627.4 million discretionary, $47.0 million legal risk (definitive); discretionary down 21% since December 31, 2025.

AltStreet's Burford review: liquidity of $621 million and $872 million of new definitive commitments in FY2025.

AltStreet's Omni Bridgeway review: Fund 6, EUR 150 million plus a 25% over-commitment; fees on the newest funds of about 2% a year on active commitments.

AltStreet's Legalist review: $1 million minimum and five-year lock-ups on the core litigation funds.

Questions before committing to a litigation fund

What is the expected call schedule, and the maximum in any year?

What are the default remedies on a missed call?

How much has the fund committed to cases relative to its total investor commitments?

How much of that is definitive?

Can distributions be recalled, and for how long?

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

Can an investor have to provide more capital after the initial investment?: In a closed-end drawdown fund, yes, up to the amount committed. The manager calls capital as cases need it, and the investor must pay each call within the notice period. Investors in listed funders, such as Burford shares, cannot be called; the company funds its own commitments. Investors in single-case vehicles usually pay up front, but should check whether the vehicle can ask for more.
What are a funder's undrawn commitments to cases?: Amounts it has agreed to fund but not yet paid. Burford reported $1,264.4 million of definitive and $627.4 million of discretionary undrawn commitments on its capital provision assets, plus $47.0 million of definitive legal risk commitments, at September 30, 2026. Definitive commitments are those where failing to fund 'would typically result in adverse contractual consequences (such as a dilution in our returns or the loss of our deployed capital in a case).'
What happens if a funder does not meet a commitment?: The agreement decides, and it usually costs the funder. Burford names dilution of returns or loss of deployed capital as typical consequences. For the client, a funder that stops paying can leave a case without money mid-stream, which is why clients and their lawyers care about a funder's liquidity and why agreements set out what happens on termination.
What happens if a fund investor does not meet a capital call?: The fund documents set the remedies, which in private funds commonly include interest on the late amount, suspension of distributions, forced sale of the interest at a discount or forfeiture of part of it. See the capital call default page for how these work. Ask for the default provisions before committing.
How do funds plan for undrawn commitments?: By matching commitments to available capital. Funds can commit more to cases than they have called, expecting some commitments never to be drawn. AltStreet's Omni Bridgeway review describes Fund 6 as EUR 150 million 'plus a 25% over-commitment.' Burford reports liquidity alongside its undrawn commitments; AltStreet's Burford review cites liquidity of $621 million for FY2025.
Do undrawn commitments affect returns?: Yes, in both directions. Undrawn amounts are not earning a return, so an investor's committed but uncalled capital sits in other assets until called. Calls that come later than expected stretch the fund's life. And on cases, further funding can raise the funder's deployed cost while the return formula, if it is a multiple of deployed capital, grows with it, as Burford's 10-K notes.