Public disclosures and academic research point to single-case litigation finance investments historically targeting internal rates of return in the 30% range, with realized long-run returns often falling in a similar 30-40% band for the equity-like end of the asset class, a reflection of the binary risk, multi-year duration, and intensive underwriting these investments require.
These headline figures need a caveat: because early-vintage cases in a fund's life tend to be the ones that resolve fastest, and often skew toward strong outcomes, looking only at a fund's realized (completed) matters at any given point in time tends to paint an overly optimistic picture relative to how the entire portfolio, including still-pending and eventually unsuccessful matters, will perform once fully realized.
At the portfolio level, industry participants generally plan for something on the order of 20-40% of funded matters to produce no recovery at all, with returns from successful cases offsetting those losses. Structures further down the risk spectrum, law firm portfolio loans and credit-oriented facilities, target meaningfully lower returns, closer to high-yield private credit than to the higher-risk, higher-return equity-like single-case model.