The asset class where the market has no vote

Litigation funding returns are decided in a courtroom, not a cycle. Knightsbridge’s Head of Capital is careful to call that a different risk rather than a lower one, and his answer to it is spread, not concentration.

Most alternative assets still answer to something. Property answers to rates. Private credit answers to defaults. Even the uncorrelated allocations tend to correlate when conditions get bad enough.

Litigation funding answers to a judge, or to two sets of lawyers reaching a settlement. The economy has no vote.

That is the pitch. What is less common is a capital raiser leading with the other side of it.

“The risk is losing your capital,” Jordan Baker, Head of Capital at Knightsbridge Litigation Funding, said in the interview. “And that can happen if you invest in a case without the merit.”

Jordan built his career raising capital across property, early stage, digital markets and structured investments, working with institutional investors, family offices and high-net-worth individuals in Australia and the Middle East. He was living in Dubai when the opportunity at Knightsbridge came up, and returned to Australia to take it. He was introduced to litigation funding through a client working at Omni Bridgeway, which he described in the interview as one of the founding firms of the industry in Australia.

Wholesale Investor introduced him at Venture & Capital 2026 as having helped facilitate more than $180 million in capital raises across asset classes.

His framing of the risk profile is the part worth sitting with.

An uncorrelated return stream is not a safer return stream. In a diversified portfolio it does something specific, which is to stop one bad quarter from arriving everywhere at once. It does not reduce the probability that any individual position is written to zero.

At the level of an individual matter, the failure mode in litigation funding is binary in a way most asset classes are not. A case either recovers or it does not. That is precisely why Jordan’s advice to investors is not to treat any one matter as the allocation. The allocation is the spread across several.

“We’ve always had the best relationships with our investors by being upfront,” Jordan said.

The structural argument for the asset class is an access argument.

Litigation funding in Australia has been institutional territory. Jordan said in the interview that some institutional investors will not consider a commitment below US$5 million, which rules out the many matters that raise beneath that threshold. The result is that wholesale capital has been locked out not of one opportunity but of a whole pipeline of them.

Jordan went further, stating in the interview that he believes Knightsbridge is the only firm allowing wholesale investors to invest alongside it, and that when investors ask why they should not approach a competitor, his answer is that there is not one offering the same access.

The firm’s response has been to structure access for wholesale and sophisticated investors as defined under section 761G of the Corporations Act, at a ticket size that lets an investor realistically build exposure across multiple matters rather than parking everything in one.

On sizing, Jordan said in the interview that an investor liquid for a million dollars should be allocating around 5 per cent to an alternative asset class, and that Knightsbridge does not encourage investors to go all in. His stated preference is that investors spread capital across multiple live cases rather than concentrate in one, and he said the data shows the outcome is profitable on that basis. Each matter is selected on its own merits, case by case. The diversification comes from holding several of them.

Jordan’s account of the selection process is that the firm may review around 100 matters to take three to five into formal due diligence, a process running for months and consuming significant capital before any investor is approached.

The consequence is that investor capital enters after the diligence has been paid for, often well into the life of a matter rather than at filing. Every matter offered to investors has come through that same filter, which is what makes spreading across them a coherent strategy rather than a scatter.

Jordan said in the interview that Knightsbridge only takes on cases offering a two to four times multiple.

Describing the range of opportunities the firm provides access to, he said these span insolvency funds, individual class action matters which he said reward extremely high returns of 200 to 400 per cent in some cases, and lower-risk, lower-return structured funds holding hundreds or potentially thousands of cases. An investor can build a position across that spectrum, matter by matter.

Returns are not guaranteed, outcomes depend entirely on the level of recovery achieved, and capital is at risk. Investors should rely on the offer documentation rather than on figures cited in conversation.

The oversight structure is heavier than investors might expect.

Capital sits with an independent custodial trustee rather than with the funder, described at the event as an entity operating since 1888. Knightsbridge does not hold investor funds. Drawdowns occur against invoices as they are issued by the legal team, with independent accounting and independent legal cost review sitting alongside. The same structure applies matter to matter, so an investor spread across several is not taking on several different governance arrangements.

“We don’t need to have access to any of the capital,” Jordan said. The design removes a category of question before an investor has to ask it.

On the legal team, Jordan said in the interview that Knightsbridge partners with Levitt Robinson for class actions, and that across the firm’s past eight class actions, five were successful in settlement and two went to trial.

“You’re only as good as your last case,” Jordan said.

Access to this asset class has not been restricted by regulation. It has been restricted by ticket size, and ticket size is a structural feature rather than a permanent one.

What that leaves is a question of portfolio construction rather than opportunity. An allocation whose outcome is set by a court is genuinely uncorrelated to everything else an investor holds. It is also an allocation where the downside on any individual matter is not a drawdown to be waited out.

The answer to that is the oldest one in investing. Do not hold one. Hold several, each selected on its own merits, and let the spread do the work the market cannot. Investors who treat uncorrelated as a synonym for defensive will eventually find out which one it was. Investors who treat diversification across matters as optional will find out sooner.