Top litigation funder Burford Capital is raising a further $350m (£255m) through debt in the wake of another record-breaking year that saw its income from investments top $500m for the first time.
Co-chief operating officer David Perla it was beefing up its warchest – through the private offering of senior notes – “opportunistically”, rather than because it needed the money now.
He said demand was now coming more from companies directly than through law firms, with 57% of new business coming that way.
Despite Covid, 2020 was the best year in Burford’s history for portfolio performance, realising $608m from its investments, of which $337m came from Burford-only investments, rather than with other funds.
Operating profit was $249 million, down a little on 2019, with profit after tax of $172m. It is restarting dividend pay-outs this summer.
The groupwide portfolio is now worth $4.5bn, five times larger than at the end of 2016.
Chief executive Christopher Bogart said: “For the first time, Burford crossed the half-billion-dollar mark for group-wide income, generating record amounts of realised gains.
“We brought in more cash from case successes than ever before, amounting to $1bn group-wide, and we ended the year with more cash on hand and liquidity than we have ever had.
“Cumulatively, our return on invested capital since inception of 92% is at its highest ever year-end level on $1.6bn of recoveries.
“Our portfolio of ongoing matters is larger than at any point in our history and we have succeeded in growing it at a five-year compound annual rate exceeding 50%. We look to the remainder of 2021 with excitement.”
The company’s annual report aid Covid “had much less of an impact on our forward progress than we might have feared a year ago”, with business picking up strongly in the second half of 2020.
In October 2018, Burford announced a $50m capital pool earmarked to finance commercial litigation and arbitration led by women, called the Equity Project.
Half of it had been spent in 2019, but by the end of last year Burford had committed nearly $57m, having received 133 qualifying requests for funding.
It said: “We know that The Equity Project is making a difference above and beyond our capital commitments to date: women lawyers have told us that the mere existence of the capital has helped them as they pursue leadership of complex matters and kick-start the gender conversation at their firms or with clients.
“We have also leveraged the Equity Project as an effective platform to raise awareness of the gender gap in law, through events, thought leadership and media outreach.”
Co-chief operating officer Aviva Will said that while $57m may seem small in the context of Burford’s finance, “we had to walk before we could run. We’re now at a good jog”.
“I think you will see a continued and increased commitment,” she added, saying the project was “changing the conversation” about the role women needed to play in law firms.
Burford is listed on AIM and since last October on the New York Stock Exchange too. Its London share price has been drifting down so far in 2021, from 711p to 595p yesterday, but it hit a Covid low-point of 280p in March 2020.