Burford Litigation Funding deploys well in excess of previous years capital
In a recent stock market update, Burford said it had deployed $399m (£291m) across the group, of which some $215m (£156.8m) was related to Burford only. This is more than 3 times higher than just 12 months ago, and it said well in excess of its prior record during the first half of 2018.
And whilst these figures appear very positive, Burford did also report that 43% of its outstanding case load had suffered delays, most likely attributed to the covid crises.
Defendants not wanting to settle cases, along with court date and trial date delays and postponements were the main covid related issues it suggested. That said, due to the way Burford, and many other funders charge for their capital, based on returns (damages), and the time it takes for the return, the report mentioned that they may well be better off financially in the end, as these delayed cases will ultimately earn Burford more money in fees in the long term.
Chief executive Christopher Bogart said: ‘We are very pleased with the level of new business activity we saw in the first half of 2021 and with the continuing strength of our portfolio, notwithstanding a fairly quiet period for portfolio resolutions.’
He went on the mention that nothing very bad has happened, it was just a case of not as much as usual had happened in the financial period under review, and although case settlements were very slow, they were seeing much more activity with new business investment opportunities in the first half of the year.
Bogart went on to say: ‘We are very pleased with the level of new business activity we saw in the first half of 2021 and with the continuing strength of our portfolio, notwithstanding a fairly quiet period for portfolio resolutions.’
Burford did however suggest that there would be a $70m (£51m) loss net of tax, the majority of which relates to non-cash accruals.
Shares in Burford funding did go down by 6% initially at 792.9p but have subsequently recovered to 847p.
Burford Litigation Funding has previously been the subject of a short seller attack from Muddy Waters which impacted the share price significantly at the time.