Burford Capital, the AIM-listed third-party litigation funder, has so far achieved a 70% return on invested capital and is already seeing the benefit of its acquisition of Firstassist, its half-year results have revealed.
Since launching in October 2009, Burford – which claims to be the world’s largest litigation funder – has committed $332m (£212m) to 43 investments, most of which is still live.
It has had 14 investments worth $48m conclude either entirely or complete trial – five in the first half of 2012 – and expects the total return from them to be at least $82m, with a current average duration of 1.3 years.
However, the company warned investors that it is currently in a “predicted interregnum” between the maturity of its short duration portfolio and the time at which the bulk of its core portfolio – where most of the money is – will start to resolve.
The results showed that total income increased 18% to $13.6m in the first half of 2012 compared to the same period in 2011, with profit static at $7m.
Burford said that the acquisition in February of Firstassist as the vehicle to launch its UK litigation finance business is “already demonstrating success”. It explained: “It was acquired for $11.5m net of cash at closing and in the four months since completion Firstassist has already contributed $4.8m in EBITDA and $3.7m in profit before the effects of acquisition accounting.”
Chief executive Christopher Bogart said: “Burford has benefited from the fact that awareness of litigation finance has never been greater, as is the demand for the solutions it can provide. Our pipeline of potential investment opportunities is at a record high, and we continue to innovate for new uses of capital and investment structures. Indications of performance are encouraging, although the core portfolio will naturally take some time to mature.”
Burford committed to six new investments in the first half of 2012, for a total of $41m, along with investing $4m in existing cases.