Woodford-backed litigation finance firm Burford Capital considers new bond issue as it reveals it ploughed record $1.3bn into cases last year

 
Lucy White
At The Old Bailey Today
Burford has backed some high-profile cases (Source: Getty)

Litigation finance firm Burford Capital, backed by investors including star fund manager Neil Woodford and Invesco, is considering a new bond issuance as it revealed the firm invested $1.3bn (£0.96bn) in legal cases last year.

The total, more than triple the amount it ploughed into litigation financing in 2016, comes as Old Mutual recently upped its stake in Burford to become a top five investor.

Over the past year, Burford has taken a number of big-name cases onto its books. It invested $45m in a FTSE-listed company – understood to be BT – to fund current and future claims, and shift legal costs off the business's balance sheet.

Read more: Litigation funder Burford Capital rules it's the best year ever as profit increases by 170 per cent

It also pumped €30m (£27m) into Hausfeld, a German claimants' firm which is pursuing claims related to the Volkswagen emissions scandal, to help the firm establish a new office and keep pursuing cases.

"We are delighted with the growth of the business in 2017. The new commitments made during the year have the potential to generate significant future income in the years to come and reflect a robust legal finance market that Burford continues to lead," said Burford's chief executive Christopher Bogart.

Read more: Woodford-backed litigation funder Burford Capital stands to profit from the Argentinian Petersen case

A litigation finance firm like Burford allows investors to put forward money to fund a legal case in return for a share of the proceeds.

Following the successes of the year, Burford has said it wil meet with investors to gauge appetite for a new bond issuance.

The firm already issued £175m worth of five per cent guaranteed sterling bonds last year, due in 2026, as well as £100m of six per cent guaranteed sterling bonds in 2016 and £90m of 6.5 per cent retail-eligible bonds in 2014.

Most of Burford's balance sheet and fund investments are in portfolio finance deals, where a law firm or business is given the investment to use across a number of cases.

Read more: Big-business lobbying group warns consumers could be duped by lawyers in collective action lawsuits

Related articles