Warehouse Facility

A warehouse facility in litigation finance is a credit line provided to a funder or investment manager to accumulate a portfolio of cases before refinancing into a longer-term fund structure or securitization. The warehouse lender — typically a bank or institutional credit provider — advances capital against committed case investments, with the expectation that the facility will be repaid when the fund closes and LP capital is drawn, or when the portfolio is monetized. Warehouse facilities allow fund managers to start deploying capital before a formal fund close, reducing the time between fund launch and first investment. The facility is typically recourse to the fund manager and may include eligibility criteria, concentration limits, and advance rate caps tied to portfolio quality metrics.

Because a warehouse facility lets a fund manager begin deploying capital before a formal fund close, funders providing the facility price it based on the manager's track record and the eligibility criteria governing which cases qualify for warehouse funding — not on the merits of any individual case in the pipeline. The facility is typically recourse to the fund manager, which is why warehouse lenders underwrite management-team credibility and fund-formation timeline risk more heavily than case-level litigation risk.