Litigation funding giant Burford Capital has raised a further £175 million to ‘grow its legal finance business’ in the latest sign of investors' growing interest in the market.
According to the firm, the funds were raised through an oversubscribed bonds issue on the London Stock Exchange by the firm’s financing subsidiary Burford Capital PLC.
The bonds will pay interest at an annual rate of 5% and mature in December 2026.
Burford said it also intends to repay the $43.75m (£34m) of loan notes created as part of the December 2016 acquisition of Gerchen Keller Capital. The loan notes are due in 2019.
Christopher Bogart, chief executive of Burford, said: ‘Law firms and corporate clients are coming to us with needs which have evolved far beyond the single-case financing model on which this industry is founded – although that remains a core area of our business. This additional long-term capital will enable us to continue to meet the global demand for Burford’s services and further solidifies our position as the industry leader with the industry’s lowest cost of capital.’
The litigation funding business has proved highly lucrative for Burford. In March this year Burford Capital announced to the London Stock Exchange that its operating profit for the 2016 calendar year rose by 61% to £102m on income up 59% to £135m.