Co-Investment vs. Fund LP Access

Co-investment suits a litigation finance fund that wants to extend its capacity on specific qualified matters without raising new committed capital, retaining the primary client relationship while sharing economics on a case-by-case basis with a capital partner it selects for each opportunity. This lets a fund pursue an outsized opportunity without needing to raise a larger fund or dilute its existing limited partners' pro rata exposure.

LP access programs suit institutional investors — family offices, endowments, or other allocators — seeking exposure to litigation finance as an asset class through a fund structure, rather than a fund itself seeking capacity on individual matters, and who want professional managers making the case-level decisions. These investors typically lack the in-house expertise or bandwidth to evaluate individual litigation matters and prefer to delegate that judgment to a specialist manager.

Criterica Capital reviews the fund's proposed matter alongside the fund's own underwriting and deploys capital directly into that case or portfolio segment, sharing in the defined economics negotiated for that specific co-investment rather than acquiring a stake in the fund itself, so each opportunity is evaluated and priced on its own terms. The negotiation typically happens on a matter-by-matter basis, so terms can differ meaningfully between one co-investment and the next.

Criterica Capital introduces qualified institutional investors to litigation finance fund managers raising capital, facilitating access to fund vehicles where investors commit capital as limited partners subject to the fund's own terms, fees, and investment period, with the fund manager making all subsequent case-level decisions on the investor's behalf. Capital calls, distributions, and reporting all flow through the fund structure rather than through any direct relationship with the underlying cases.

Economics are negotiated per co-investment — typically a shared return structure specific to the matter or segment — rather than a standardized fee, since each co-investment is priced against the underlying case economics rather than a blanket rate applied regardless of the specific opportunity. This case-by-case negotiation means pricing can vary significantly across different co-investment opportunities even within the same fund relationship.

Cost follows standard fund economics — management fees and carried interest set by the fund manager — rather than case-specific pricing, since the investor's exposure is to the fund's overall portfolio, not an individual matter, and the fee structure compensates the manager for portfolio-wide decision-making. These fees compensate the manager regardless of which specific cases within the portfolio perform well or poorly in any given period.

Risk is tied to the specific matter or segment co-invested in, giving the capital provider a targeted, case-level risk profile rather than exposure to the fund's entire book, which concentrates both the potential upside and downside in that one opportunity. A capital provider pursuing several co-investments across different funds can build its own form of diversification without committing to any single fund vehicle.

Risk is diversified across the fund's full portfolio as constructed by the fund manager, meaning an LP's outcome depends on the manager's overall investment decisions across many matters, not any single case, smoothing performance relative to a concentrated co-investment position. This delegation of judgment is the central trade-off an LP accepts in exchange for diversification and professional management.

Co-investment wins when a fund has identified a strong matter or portfolio segment that exceeds its own capacity or risk appetite and wants a capital partner on defined terms for that specific opportunity rather than diluting a broader fundraise. It also lets the fund preserve the primary relationship with the underlying claimant or firm rather than introducing a new counterparty into that relationship.

LP access wins for an investor seeking diversified exposure to the asset class through professional fund management, without needing to evaluate individual case-level opportunities or build the underwriting capability a co-investment strategy would require.