Burford’s largest shareholder takes big stake in Manolete

Cooklin: One million shares sold

The largest institutional shareholder in Burford Capital has taken a major position at Manolete Partners after a unsettled few weeks for the insolvency litigation funder.

The AlRajhi family, one of the richest families in Saudi Arabia, is behind Mithaq Capital, which now has a 16% stake in Manolete to add to the 10.5% of Burford that it owns.

The patriarch of the family, Sheikh Saleh AlRajhi, who died in 2011, founded the largest Islamic bank in the world, AlRajhi Bank.

At the end of last month, two of Manolete’s main institutional shareholders sold up: SFM UK – a series of funds related to financier George Soros – and Canaccord Genuity.

The company’s share price slumped by a third in one day from 295p to 198p at the time of the share sales and a Q3 trading update from Manolete that said it had achieved record case completions and cash inflows.

But it said there was “a continued low level of new case investments caused by the ongoing extraordinary UK government economic support measures”. These have led to a big fall in the number of company insolvencies.

However, it predicted that the longer-term impact of Covid-19 on the economy “will lead to an increased rate of corporate insolvencies” and meant the company had “strong growth prospects”.

Having gone as low as 176p this year, the shares rose 10% yesterday to close at 205p.

At the same time, chief executive Steve Cooklin has sold a million shares for £1.8m; he still retains 6.8m shares, 15.7% of the company’s issued share capital. Moulton Goodies, a vehicle for veteran investor John Moulton, is the largest shareholder, with 26.6%.

Manolete has had a difficult few months. Its shares reached an all-time high of 585p in May 2020, but in July it was the subject of an anonymous attack on an investing website that shook confidence and sent the price tumbling.

Its half-year results in November showed that revenue, profit and new case investments were all rising sharply. In the third quarter of Manolete’s financial year, which ends on 31 March, it completed 43 claims – making 95 in the year to date – and by the time of writing had risen to 108 cases.

Manolete completed 54 cases in the whole of its last financial year.

Gross cash collected from completed cases in the nine months to 31 December 2020 increased by 60% to a £9.3m, of which Manolete retained £4.8m. Cash overheads were £3.2m. It has around 250 live cases.

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