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Burford Capital Makes Debut On New York Stock Exchange (2)

Oct. 19, 2020, 5:55 PM; Updated: Oct. 19, 2020, 9:34 PM

Burford Capital made its first appearance on the New York Stock Exchange on Monday, becoming the first litigation funder to be publicly listed there.

Shares were up 8.47% after the close of trading.

The listing comes on the heels of a busy year for Burford, which has been traded on the London Stock Exchange since 2009.

The firm recently released its first-half results, which said its portfolio made $478 million in gains in 2020, a 40% increase from the same period last year. Burford said its broader investments and returns climbed to $820 million, a 32% jump.

The funder also said commitments to new assets fell 74% to $195 million and deployments fell 42% to $258 million in the first half. Burford’s CEO told Bloomberg Law when the results were released that he attributes lower commitments in part to firms and companies attending to other urgent business issues during the beginning months of the pandemic.

The first half results also revealed that a Burford investment of $145 million in a group of related cases had paid out $423 million. This was an example of “claims monetization,” which gives funders a direct stake in a matter without agreeing at the outset to pay lawyers fees and expenses in exchange for a share of returns.

In a statement Monday, Burford CEO Christopher Bogart called the firm’s NYSE listing a “proud moment.”

“Our new listing will increase the pool of investors able to invest in Burford’s shares while more broadly raising our profile in the U.S. capital markets, which may in time lower our cost of capital,” Bogart said. “For our clients, this listing gives them further proof that working with us means partnering with a gold standard finance firm that is open and transparent about its operations.”

Burford said it has a $4 billion portfolio and has worked with 93 of the AmLaw 100 firms and 89 of the largest global law firms. Funders generally keep the identities of firms involved in their investments private.

Though it has been popular in Australia and the U.K. for decades, litigation finance has only gained steam in the United States relatively recently, and defense-side entities have criticized it over lack of transparency. The U.S. Chamber of Commerce has been one of the most vocal critics, calling for regulation that would require parties to disclose any funders of litigation.

“Investing in lawsuits in exchange for a cut of any settlement or award doesn’t increase access to justice, it allows funders to play blackjack with other people’s lawsuits,” said Harold Kim, president of the U.S. Chamber Institute for Legal Reform, in a statement Monday. “The Institute for Legal Reform will keep calling for legislators and government agencies around the world to take immediate action before outside influences turn our courtrooms into casinos.”

The litigation finance industry has found success in the U.S. by pitching itself as a way to bridge the gap between client pocketbooks and the steep costs of litigation. Among others, Big Law firms like Paul Hastings and White & Case have had partnerships with litigation finance firms.

Litigation finance firms also scored a big win this summer when the The Uniform Law Commission ended a yearlong initiative to consider litigation funding rules. A New York City Bar Association group also endorsed the practice earlier this year.

(Added quote from Harold Kim in paragraph 11.)

To contact the reporter on this story: Stephanie Russell-Kraft in New York at srussellkraft@gmail.com

To contact the editor on this story: Rebekah Mintzer in New York at rmintzer@bloomberglaw.com
Chris Opfer in New York at copfer@bloomberglaw.com

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