Burford Capital, the largest litigation finance firm in the world, released its 2020 annual report recently. Incorporated in 2009, Burford trades on the London Stock Exchange’s AIM, as well as the NYSE. It counts 60 full-time lawyers among its 133 full-time staff. Burford boasts a total portfolio of $4.5 billion, including balance sheet assets, strategic capital, and private funds.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
Burford Capital, the largest litigation finance firm in the world, released its 2020 annual report recently. Incorporated in 2009, Burford trades on the London Stock Exchange’s AIM, as well as the NYSE. It counts 60 full-time lawyers among its 133 full-time staff. Burford boasts a total portfolio of $4.5 billion, including balance sheet assets, strategic capital, and private funds.
Seeking Alpha shares cautiously optimistic insights on Burford’s numbers. Burford currently has $2.7 billion in private funds under management. This includes funds currently invested, and is split into the Strategic Value Fund ($500 million), Burford Opportunity Fund ($300 million), and Burford Alternative Income Fund ($300 million). Most of the current investments Burford makes are in Litigation Finance in European markets. Exceptions include an evergreen investment in American markets and some post-settlement asset deployment.
Moving forward, it’s believed that COVID-related litigation will lead to increased funding activity in the months and years ahead. Burford’s addressable market is too large and varied to pin down. Globally, $860 billion is spent on legal fees—nearly half of that in the United States alone.
By cost, Burford has achieved positive outcomes in 84% of its funding deployments. Eight Burford-funded cases which were realized last year produced ROICs of 199% or more. This suggests that Burford relies on big-ticket cases as well as profitable settlements as a core part of its earnings strategy. To date, Burford has deployed $831 million and recovered more than $1.5 billion. This, combined with a conservative debt structure, leave Burford well-positioned for further investments in the coming year.
Some even speculate that the Muddy Waters attack has strengthened Burford’s reputation in the community, and its commitment to transparency. With Burford co-founders Chris Bogart and Jonathan Molot recently purchasing millions in shares, it’s obvious the company execs believe Burford’s success will continue, and that will eventually translate into share price appreciation.
