Legal Business Blogs

‘Our business has evolved’: Burford Capital income rises by 60% as demand for litigation finance grows

Litigation finance outfit Burford Capital has seen its turnover soar 59% to $163.4m in a year which saw the financer aggressively expand with a US merger. Profit after tax was also up 75% to $115m, while the listed company now manages $2.3bn for legal finance.

The eight-year-old company expanded its US offering with the acquisition of Chicago-based investment manager Gerchen Keller Capital for $160m, giving Burford a 20-person team in Chicago and an overall headcount of 80, including 40 lawyers.

The move combined the two largest litigation funders globally and added a diversified portfolio in the management of private capital and investment income.

Burford made $378m in new legal investments in 2016 and recovered $216m in cash from investments, up 48% on the previous year.

The firm’s annual report said that demand for the company’s services was on the up, in litigation and more broadly: ‘Our business has evolved so much that “litigation finance” often seems to narrow a term for what is really “legal finance”.’

According to Burford, the number of US private practice lawyers saying their firm has used litigation finance has grown four-fold in four years to 28%, however in the UK only 2% of in-house lawyers had used litigation assets and as many as 67% were unaware it was possible to do so.

The global litigation finance market is also opening up, with key litigation and arbitration centre Singapore and Hong Kong both introducing legal frameworks to open up their markets to litigation finance.

Last year Burford also appointed Fried, Frank, Harris, Shriver & Jacobson’s former head of competition and antitrust Craig Arnott as its new managing director after the sudden resignation of Nick Rowles-Davies.

For more on third party funding see the feature: ‘The bigger short – third party funding bets on new markets and models’