Litigation funder Burford Capital generated more profit in the first half of 2017 than any full year in its history, revealing a total income rise of 130% from last June to $175.5m.
The jump for the company, which operates in law as an alternative business structure, was a result of a booming investment income which rose by 148% to $161.6m in the same time period, the firm said.
Company chief executive Chris Bogart told Legal Business this signified litigation funding was a growing area. ‘Both law firms and clients are starving for financial solutions when it comes to litigation’, he said.
Burford chair Sir Peter Middleton highlighted the company’s $488m commitment to new investments in the first half of 2017. He added: ‘In just under eight years, Burford has grown from an £80m startup [in 2008] to become the clear industry leader.’
Burford generated over $100m in profit by selling its 25% stake in the Petersen Group case against the Argentinian government in March this year. Petersen, an investment company, sued the Argentinian state after it seized Petersen’s 25% stake in energy company YPF, causing the company to go bankrupt. Burford had funded Petersen in the case.
A key investment Burford made in litigation this year was partnering with competition boutique Hausfeld to offer a financing package for UK claimants to pursue follow-on damages against truck manufacturing cartelists. The companies were fined a record-breaking €2.93bn by the European Commission in July 2016 for operating a 14-year price-fixing cartel.
In a July statement, Hausfeld and Burford promised to fund the ongoing costs of litigation against manufacturers Volvo/Renault, Daimler, Iveco and DAF.
Burford’s unprecedented six-month performance figures excluded its December 2016 acquisition of Chicago-based investment manager Gerchen Keller Capital, which created a firm with $1.2bn in assets in ongoing cases.
The combination gave Burford access to Gerchen Keller’s 20-strong team in Chicago and also added $15.4m to the company’s top line.