The financial might of leading litigation funders was brought home today as one company posted financial results to rival those of the biggest law firms.
Operating profits at Burford Capital Ltd rose 132% to £207 million in the year ending 31 December on income up 109% to £244m, the company told the London Stock Exchange. Dividends from investments more than doubled.
The scale of the Burford's profits would rank it comfortably in the UK top 10 law firms.
Shares in Burford leapt 28% following the announcement of the full-year results. Shareholders were told they can expect a 20% increase in their annual dividend.
Christopher Bogart, chief executive, said: ‘The past year saw an explosion of demand for Burford’s capital from clients around the world, including from our expansions into Asia and Europe.
‘We met that demand by raising incremental capital on our balance sheet and by making robust use of our new investment management business. We grew our team by 23 people so that we now field a team of more than 90, including more than 40 experienced lawyers, and we have by far the largest capital base in the business.’
The company has ramped up its activity in the first two months of this year, committing £92m to 12 investments in 2018, compared with less than £1m in the same period last year.
This week, Burford announced it had entered an agreement to sell its entire entitlement in an arbitration matter for £77m in cash, after investing £9m.
The Teinver matter arose from the expropriation of two airlines by the Argentine government. In July 2017, an arbitration tribunal made an award in favour of the claimants entitling Burford to receive almost £72m under its funding agreement.
Last week Burford announced its was setting up an insurance business to cover adverse costs risks globally. The company has written 50,000 policies providing adverse cost insurance in England and Wales, and believes there is a market for extending risk cover for larger complex litigation and arbitration.