Soros Fund Management is pushing into a branch of litigation finance thatfew hedge funds have entered. His family office is bankrolling a company that’s creating investment portfolios out of lawsuits, according to a May regulatory filing.

The development is the latest twist on the litigation funding market, whichhas drawn criticism for monetizing and encouraging the lawsuit culture in the U.S. The firm Soros is backing, Mighty Group, bundles cash advancesthat small shops extend to plaintiffs in personal injury suits in return for acut of future settlements. Mighty Group’s approach opens the door toanother potential development: securitizing individual lawsuit bets for saleto other investors.

“There are all the ingredients there to securitize these things,” said Adrian Chopin, a managing director at legal finance firm Bench Walk Advisors. “A diversified, granular pool with predictable outcomes. The problem is, you can’t yet get these things rated” by credit agencies. […]