The financial muscle of the litigation funding market today became apparent as one of its biggest operators posted annual profits beyond £100m for the first time.
Burford Capital announced to the London Stock Exchange that operating profit increased for the 2016 calendar year by 61% to £102m.
Income increased in the same period by 59% to a record £135m.
Burford, which works with law firms from offices in London, New York and Chicago, said the demand for capital from the legal sector was reflected in record new litigation finance investment commitments.
The company now has around £311m staked in litigation across the world, 83% more than at the end of 2015.
Burford noted that the acquisition of fellow investor, Chicago-based Gerchen Keller Capital, in December has added around £1bn of new assets and enable greater scale and income diversification.
Christopher Bogart, chief executive of Burford, said: ‘The acquisition of Gerchen Keller Capital capped a strong year and positioned Burford for the future, with increased scale and the ability to source both public and private capital as our business continues to grow and expand. With an 80-plus strong team, including 40 experienced lawyers, and the largest capital base in the business, we are committed to serving clients around the world as the premier provider of capital and risk solutions to the legal sector.’
The company’s share price rose by 2.4% to 752.5p in the hour after the results were announced, a trebling of value in a year. The annual dividend increased by 14.4% in US dollar terms and by 38.3% in sterling.
Meanwhile, another litigation funder has become the first of its kind to open operations in Germany.
Therium Group Holdings, which has almost £250m committed to litigation around the world, has added a Dusseldorf office after identifying a ‘substantial’ market for litigation funding in the country.
This is attributed to the increasing number of corporate and commercial legal disputes within a regulatory environment that has become more complex in recent years.
Neil Purslow, chief investment officer, said: ‘We have been active in Germany for some time but the increasing demand for our expertise from both lawyers and claimants across financial services and other areas make this a natural point to open an office in the country.’