Portfolio financing to the fore as Burford investments soar to $1.3bn in 2017

Bogart: Potential to generate significant future income

Leading third-party litigation funder Burford Capital made $1.3billion (£960m) in new commitments last year, more than triple its 2016 level, it announced yesterday.

It also illustrated how single case financing, originally the heart of litigation funding, is now just a minor part of Burford’s business.

The AIM-listed company said the new commitments reflected “a number of dynamics in Burford’s business”.

These were: continued growth in demand for capital in its core litigation finance business; access to capital through direct balance sheet investing and its new investment management business; and continued expansion of Burford’s product offerings and investment strategies.

Just 5% of the commitments ($34m) were to single cases, compared to 54% ($378m) to portfolio finance. In 2016, 12% of the commitments were to single cases.

Recourse finance – cases where Burford has recourse to an underlying asset beyond the legal claim – made up 33% ($227m) and legal risk management, where capital is only deployed if the case fails, the remaining 8% ($59m).

The growth meant that Burford said it would hold meetings with fixed income investors with a view to possibly making another bond issue.

Chief executive Christopher Bogart said: “We are delighted with the growth of the business in 2017. The new commitments made during the year have the potential to generate significant future income in the years to come and reflect a robust legal finance market that Burford continues to lead.”

By contrast, the other pioneering funder to list on the UK stock exchange – Juridica – continues its wind-down and in an update issued yesterday said that it now has just two remaining litigation investments.

It said both investments “have the potential to generate significant value for the company” and should concluded by the end of this year.

“Investors should be assured that the board of directors will continue to operate the company efficiently and monetise the company’s remaining investments in an orderly fashion so as to preserve and realise the full value of all remaining investments.”

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