Litigation Funder Delivers Double-Digit Profit Growth
The value of Burford Capital assets under management also rose by 47 percent in 2018.
March 13, 2019 at 07:33 AM
3 minute read
Burford Capital, one of the world's biggest litigation funders, has seen a 23 percent increase in operating profit to $354 million in the 12 months to December 2018, the company announced today.
The London-listed financier also registered income growth of 23 percent to $420 million and reported that its assets under management increased by 47 percent to $2.5 billion, up from $1.7 billion in 2017.
The funder's income from investments in litigation rose 22 percent to $389 million, compared with the previous year's 127 percent increase to $318 millio. The fund made 26 different investments in 2018's performance, compared to 20 the previous year.
Burford chief executive officer Christopher Bogart, a former litigator at Cravath, Swaine & Moore, said in a statement: "The big question this year was whether 2017's explosive growth was a one-time anomaly. These results show that it was not.
"Burford has committed $2.6 billion to new investments in just the last two years, more than twice its lifetime cumulative commitment level prior to that time. That is extraordinary and suggests a sea change has occurred in the legal finance marketplace."
On challenges facing the London market, Bogart pointed out that the global arbitration scene is becoming more competitive.
"There are more and more arbitration centres opening and though London and Paris are preeminent, there is no question they are being challenged and are under pressure to innovate and become more efficient," he said.
Since launching in 2009 with five lawyers, the firm has boosted its global legal headcount to 55. The company also added offices in Sydney and Washington D.C. to those already operating across the U.S., Europe and Asia.
It said in a statement that it is a financing partner to 90 percent of the Am Law 100.
Last October, the company raised $250 million by selling new shares on the London Stock Exchange.
In the same month, Burford sought to address the legal profession's gender pay gap by launching a $50 million fund, known as the Equity Project, to be used exclusively for commercial disputes led by women or women-owned firms.
The company's report says that $30 million worth of requests for financing under the Equity Project have made it into the company's underwriting process for further review.
Bogart said: "If that's a source of a combination of growth for us and general improvement in the legal sector, that is something we're interested in continuing."
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