Burford shares jump 28% on ‘exploding’ demand for litigation finance
CEO Christopher Bogart said the company is seeing an “explosion of demand from clients around the world, including from our expansion into Asia and Europe”.
Shares leapt by more than 28 per cent in early trading after the company, which claims to be the world’s largest provider of funding for litigation and arbitration, pushed its income up 109 per cent to $341m during the year, helping increase net profit after tax by 130 per cent.
It has proposed a 20 per cent increase in its annual dividend to 11 cents a share.
Burford said recoveries from its investments hit a record $362m. The company, which has headquarters in New York, Chicago and London, said 2017 was its eighth year of significant growth.
The strong results come a day after Burford revealed it had made a return on one investment in a legal dispute - between a Spanish company and the government of Argentina - of more than 700 per cent over approximately seven years.
The company has sold on its share of a £325m arbitration award to unnamed institutional investors before the money has actually been paid out. The transaction further marks the emergence of a secondary market in dispute payouts – that is, treating awards from litigation and arbitration as an asset class.
Litigation financers help to fund the costs of legal action in return for a share of any award made by a court or arbitrator. In this case, Burford had provided financing to support a claim by Teinver SA, a Spanish company, which jointly owned two airlines that were renationalised by Argentina in 2008.