Litigation funder Burford Capital has announced its strongest ever results, with profits for the first half of 2017 greater than the whole of 2016, driven by rising client demand.
Highlights from the financial results for the year ended 30 June 2017 included an increase in income by 130% to $175.5m (£133.5m), operating profit up by 151% to $155m, and profits after tax up by 170% over the previous year to $142.7m.
A total of 11 successful investments contributed to the results, including the sale of just 25% of one complex claim generating $100m in cash profit alone – more than five times the investment.
In the first half of 2017, investment income increased by 148% to $161.6m.
The interim report said cash generation of $173.7m from investments on balance sheet exceeded every previous half-year period.
During the first half of 2017, eight-year-old Burford has made $488m in new investment commitments, more than double its commitments in the first half of 2016.
An investor in the original Burford share offering in 2009 would have seen a return on investment of more than 1,000% by this month.
Burford’s acquisition of US rival Gerchen Keller Capital in December 2016 has created what it described as “the industry’s largest fund manager”, with $1.7bn in assets under management at 30 June 2017.
In March, the litigation funder announced a 75% increase in net profits for 2016, but warned that the Jackson reforms had made it impossible to provide after-the-event (ATE) insurance for “large and complex” commercial cases.
Sir Peter Middleton, Burford’s chairman, said: “In just under eight years, Burford has grown from an £80m start-up to become the clear industry leader. In six months, we have committed almost half a billion dollars to new investments.”
Christopher Bogart, the funder’s chief executive, said: “Burford has had an exceedingly active first half. Our continued strong growth has been driven by rising client demand as well as our ongoing investment in broadening our product offering and pioneering new markets.
“As the industry advances, we continue to innovate legal cost and risk management techniques while delivering strong investment returns for shareholders.”