Burford Raises $144M on London Stock Exchange

Inside The London Stock Exchange. Photo by Chris Ratcliffe/Bloomberg

The litigation finance shop Burford Capital announced on Tuesday that it had raised 100 million pounds, or the equivalent of $144 million U.S. dollars, on the London Stock Exchange, which will take its cumulative investment under management to about $1 billion.

Burford CEO Chris Bogart said the company’s U.K. subsidiary raised the capital through a bond offering on the London Stock Exchange, and turned away orders from investors. The bonds will pay 6.125 percent annual interest and mature in 2024.

“One billion dollars of litigation finance is a significant milestone for us,” said Bogart.

He said Burford only invests in commercial litigation, and that most of the firm’s business is on the plaintiffs side. The firm declined to provide client names or names of investors in the recent bonds.

But a spokesman said that previous investors include Invesco and Fidelity.

The litigation finance industry in the U.S. and U.K. is maturing and other active litigation finance firms include Bentham IMF and Keller Capital LLC. Even the institutional lender, Citibank, has a division that offers litigation finance services, although a bank representative said it doesn’t invest in one-off cases.

“We just don’t have the expertise,” said Michael McKenney, head of investment finance at Citi Private Bank’s law firm group, in an interview with Big Law Business last year. “That would require us to be engaging the lawyers and doing a different sort of due diligence than the banks typically perform.”

He did, however, say that he sees the litigation finance business heating up. Citi, for its part, offers lending on a portfolio basis, financing litigation firms as a whole, or practices within a law firm based on their track record for winning cases.

“We have taken the view that (litigation financiers) fill a need in the market,” McKenney said.

“I think it’s happening because of the ability to generate strong returns… and because the expense required to pursue these cases (as well as) uncertainty around timing of a settlement — the process has lengthened. Fee awards appear to not be top priority on the judge’s docket. So these matters tend to sit for a while.”

At the time, McKenney declined to name any of Citi’s clients or provide specifics about its litigation finance business like how much of its law firm lending business it takes up.