Niche player attracting income investors Burford Capital is one of the most remarkable companies on AIM. Founded just five years ago, Burford has evolved into an AIM-quoted company able to win the backing of one of the UK’s most celebrated investors. The company is ‘the world’s largest provider of investment capital and risk solutions for litigation’. Put simply, Burford provides money to organisations that are seeking damages from others, in exchange for a fee, interest, share of the award or a combination of the three. This makes Burford an extremely rare type of company, with Juridica Investments the only company on AIM that comes close to this sort of activity.
Burford provides financing to law firms Burford has found some fame as one of star fund manager Neil Woodford’s few AIM holdings. Mr Woodford built his reputation as an income investor at Invesco over a period measured in decades. The fact that his new fund owns over 7% of Burford should be reason enough for income investors to take a look. Burford Capital was incorporated in 2009 and the shares began trading on AIM in October of that year. The company was formed from Burford Group, an organisation that dates back to 2007. Today, Christopher
Bogart is Chief Executive Officer of the business. Mr Bogart is one of the founding principals of the business and has enjoyed a long career as a litigator. Burford’s Chief Investment Officer, Jonathan Molot, was also closely associated with the company from the early days, having been investment committee chairman of the company’s US subsidiary. Burford can become involved in the litigation process from different stages and perspectives. Classic litigation funding is the provision of funding to a plaintiff that simply cannot afford the lawyers they need to effectively prosecute. Here, Burford’s support is required to get the case off the ground. In other instances, Burford are approached part-way through the process, such as when the plaintiff realises that more finance is needed to secure victory. This frequently occurs as the cost and duration of the process is underestimated (q.v. Jarndyce v Jarndyce). Other examples include funding pending an appeal (when the judgement has been won but an appeal is launched)
Christopher P. Bogart, Chief Executive Officer
or simply funding a plaintiff that is awaiting cashflow at the end of the process. In addition, Burford provides financing to law firms, such as those that have arranged not to be paid until the case has concluded, or a firm that is simply waiting to receive the fee that it has been promised. The contract that Burford may agree with plaintiffs is not necessarily
not necessarily a straightforward ‘percentage of win’ agreement
Published on Dec 8, 2014