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Litigation Funders Face Their Hardest Sell: Big Law

By Roy Strom and Ben Hancock 

When the two largest rivals in an industry combine, it is typically a sign of a mature market. In the case of litigation finance, throw that rule out. The December 2016 acquisition of Gerchen Keller Capital by Burford Capital — at the time the two largest companies investing in commercial litigation — has proved to be a spark plug for the nascent business of financially backing lawsuits.

Before it was acquired, Chicago-based Gerchen Keller boasted to be the world's largest litigation financier, having raised $1.3 billion. In the 18 months since its sale, major funders in the U.S. have announced raising $1.75 billion to put toward new cases. That is more than three times the amount raised in the 18 months prior to Burford's acquisition. Eight different funds or debt issuances have raised more than $100 million since GKC's sale; there were just three capital raises of that size in the prior three years.

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