Burford boosts litigation funding warchest

Bogart: continued demand for third-party funding

Burford Capital has raised almost £90m from a bond issue, pushing the third-party funder’s asset base beyond  the half-billion US dollar mark, it announced this week.

The capital boost means cash reserves available for litigation finance are now more than £118m, after a period of rapid growth.

It raised the money by issuing bonds on the main market of the London Stock Exchange through Burford Capital plc, its UK financing subsidiary.

The offer was for Sterling guaranteed bonds carrying a 6.5% fixed annual interest, with a maturity date of August 2022. Estimated net proceeds were £88.9m.

The issue, which generates cash equivalent to around US$150m, brings the dollar value of Burford’s assets to more than $500m. At the end of 2013, its total net assets were $351,511.

Earlier this month the company announced a surge in new commitments in the first six months of 2014. It said there was continuing “strong demand” for its services and that the proceeds of the bond issue would help fuel the growth of its litigation finance business.

Christopher Bogart, Burford’s chief executive, said: “We are very pleased with the market response to our bond issue and we now look forward to committing this additional capital, and continuing to work with our existing clients while also continuing to broaden the reach of Burford’s corporate financing solutions.”

Risk factors observed in the bond issue’s prospectus included the impact of the Jackson reforms. It said: “While the Jackson Reforms were philosophically in favour of litigation funding, the implementation of the Jackson Reforms has created uncertainty in the UK legal market which may reduce the total volume of litigation or restrict the returns available for the Group from UK litigation matters.”

In June Burford revealed it had made a £6.6m profit on a £9m investment after a successful arbitration claim. AIM-listed power generation company, Rurelec plc, was paid £19m in compensation after the Bolivian government nationalised its controlling stake in a Bolivian power company.

Since its inception in 2009, Burford has reported 26 cases concluded, yielding £102m in gross investment recoveries and £39m net of invested capital – a net return of 63%.


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